Cisco Systems’ move is in line with the company’s aggressive strategy. The San Jose, California-based company said it plans to start selling servers. Cisco has an impressive cash stockpile - $29.5 billion in its last quarterly update – and it’s already taking advantage of the economic recession, a thing few companies can aford to do. 

 

As for the small fish that gets eaten by Cisco, the San Francisco-based Pure Digital Technologies Inc. looks forward to the acquisition. The agreement is expected to be finalized in the fourth quarter of 2009 and Cisco will pay $590 million in stock for Pure Digital, and another $15 million in retention-based equity incentives. 

 

The purchase of Pure Digital, which sold over 2 million cameras since it launched in 2006 in the United States, is yet another step by Cisco in the consumer products market. In 2003, Cisco acquired Linksys and its line of home and small businesses networking gear, and in 2005 it bought Scientific Atlanta, a top producer of cable TV set-top boxes. 

 

However, it’s not clear yet how will Cisco take the Flip Video to another level by integrating it with other of its products. 

 

"The acquisition of Pure Digital is key to Cisco's strategy to expand our momentum in the media-enabled home and to capture the consumer market transition to visual networking," said Cisco’s senior VP of Corporate Development and Consumer Groups, Ned Hooper.