Cisco's Acquisition of Tribe: A Sign Of Things To Come

Yesterday I read that Cisco (CSCO) was buying Tribe. It was odd, admittedly, but I chose not to write about it because I am no expert in networking - as in what Cisco does vis-a-vis routers, hubs and deflingers. But reading the blogosphere cry foul and run with Marc Andreessen’s quote that “The idea that Cisco is going to be a force in social networking is about as plausible as Ning being a force in optical switches.”

That’s cute and all but with all due respect to Marc and Ning, please don’t cast Ning in the same breath as Cisco, especially when it comes to M&A.

The point is: Today social networking accounts for a lot of traffic on the Web, and Cisco drives the traffic on the Web. This was a cheap acquisition into a notable brand in the social networking space, and it won’t make a dent in Cisco’s balance sheet.

More importantly, we’re in a phase of the Web where companies are going to take leaps and bounds when it comes to M&A. Go dust off the history books and research what companies like American Express (AXP) or Western Union (WU) or many others started off as, i.e. nothing really related to what they do today. The web is changing, it’s evolving. Companies like Microsoft (MSFT), Cisco etc. who struck it big during the early days will probably only succeed if they adapt. Cisco is taking one small step for Cisco in achieving that, but it’s potentially one major step for mankind.