Cisco Bets That Businesses Will Join Its Social Networking Tribe

Ann All

In one of the oddest acquisition announcements in recent memory, Cisco made a splash with its intent to buy some of the assets of Utah Street Networks, the operator of, an early social network that has fallen on hard times since the rise of Facebook and MySpace.


Details are vague, but Cisco reportedly plans to embed Utah Street's technology -- used to create and maintain online social communities -- in some of its products. It will not have anything to do with the operation of


Cisco's target appears to be companies with Web sites that want to add social networking features to get closer to their customers. This is a hot trend that shows no signs of abating.


Reaction in the blogosphere has been mostly anti-acquisition, as exemplified by this GigaOM posting unambiguously titled, "Cisco's wrong bet on social networks." If the buy is an effort for Cisco to look cool, says blogger Om Malik, it won't work.


Cisco's biggest customers, cable and telecom companies, are the "antithesis of cool," he says, and control freaks besides -- which flies in the face of the community vibe of social networking.


Not only that, Malik adds, but social networking isn't making money yet. "Learn to live with the fact that you are rich and old school," he advises Cisco.


Casting a pro-Cisco vote is blogger Ashkan Karbasfrooshan, who notes that the acquisition isn't costing Cisco much, involves a well-known social networking brand, and "won't make a dent in Cisco's balance sheet."


More interestingly, he points out that the rapid evolution of today's Internet economy is driving companies to make purchases that, on the surface, appear to have little to do with their established business models. There are plenty of examples of forward-thinkers -- i.e., American Express and Western Union -- that have pulled this off successfully in the past.

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