Cisco’s WebEx Recieves Cheeky $1 Bid From SalesCrunch

Online meeting space startup SalesCrunch has made a bold bid for Cisco Systems’ WebEx business.

SalesCrunch officials on 13 March submitted an unsolicited bid to buy WebEx from Cisco for $1 (63 pence) – and a 15 percent stake in the startup.

Publicity Stunt?

SalesCrunch founder and CEO Sean Black sees the move as a way of rapidly building up his customer base as well as his engineering capabilities. While some observers are calling the bid a publicity stunt, Black said the goal would be to migrate all of Cisco’s WebEx customers over to his company’s technology within 12 months.

“At SalesCrunch, we deliver a far superior technology platform – optimised for sales and meetings efficiency – at a fraction of the cost attainable by WebEx and its competitors who have massive legacy infrastructure costs,” he said in a statement. “Although WebEx doesn’t fit into Cisco’s core business, it doesn’t have to suffer the same fate as Flip.”

Black was referring to Cisco’s Flip video camera business, which the networking giant closed down in 2011 as part of a larger restructuring of the company aimed at saving $1 billion (£633m) in expenses and getting its financial feet back under it.

For a time last year, as Cisco was reorganising its operations, speculation was that the company also would shed either its Linksys or WebEx business, or both. Cisco officials denied the rumours.

Cisco officials have not commented on SalesCrunch’s offer.

Collaboration Move

Cisco bought WebEx for $2.9 billion (£1.8bn) in 2007 as the company looked to expand beyond its networking roots. WebEx is part of Cisco’s larger collaboration business, which also includes such products as TelePresence and other video communications technologies. At the time, some analysts questioned whether WebEx was the right move for Cisco.

Collaboration, which has become a key pillar of Cisco’s overall business, generated more than $1 billion in sales during the fourth quarter of 2011. Cisco doesn’t break down how much of that came from WebEx.

Two-year-old SalesCrunch, which counts Accel Partners, First Round Capital, NextView Ventures and AOL Ventures as its backers, offers an online browser-based collaboration platform that includes online meetings, analytics, sales delivery, training and other collaboration capabilities, and integrates the platform with others, such as Salesforce.com and LinkedIn, according to its Website. The system can do everything from set up personal meeting rooms and dedicated conference numbers to letting meeting organizers know whether attendees are listening or answering email.

Previous Bid

SalesCrunch’s Black told Business Insider that his company had made a bid for WebEx last year, but that Cisco officials were not interested.

“We met with them about six months ago in San Francisco,” he told the publication. “It quickly became clear that the only way to get them to take our offer seriously is to bring it to the attention of the shareholders.”

That’s where the 15 percent stake comes in. Black reportedly said that with an offer that includes a stake in SalesCrunch, Cisco’s board of directors would have to at least discuss the offer.

“The board is going to have to have a conversation,” he said.

Jeffrey Burt

Jeffrey Burt is a senior editor for eWEEK and contributor to TechWeekEurope

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