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Cisco Spends $800 Million for SightPath

Internet: Purchase will bring software on board that expedites the flow of video and bulky files.

March 30, 2000|From Bloomberg News

Cisco Systems Inc., the No.-1 maker of computer networking equipment, agreed to buy SightPath Inc. for $800 million in stock to add software that speeds the flow of video and bulky files on the Internet.

SightPath's software lets companies more easily broadcast live events on the Web and centrally manage engineering designs or video for diagnosing medical conditions. The closely held company, based near Boston in Waltham, Mass., has 76 employees.

SightPath will help San Jose-based Cisco offer Internet service providers and businesses easier ways to send information across public communications networks. Cisco has said it plans to buy 20 to 25 companies this year. SightPath is its 55th acquisition overall.

"It gives them another piece of the pie," said analyst Matthew Barzowskas of First Albany Corp., who rates Cisco a "buy."

Cisco agreed to acquire JetCell Inc. and InfoGear Technology Corp. for $501 million earlier this month.

Shares of Cisco fell $1.81 to $76.06 on the Nasdaq Stock Market. On Monday, Cisco became the world's most valuable company when it overtook Microsoft Corp. The two traded the top spots Wednesday.

Investors in SightPath include venture-capital firm Greylock; Intel Corp., the world's largest chip maker; and Pilot House Associates LLC, the investment firm of Amos Hostetter, former chief executive of MediaOne Group Inc.'s cable-TV unit.

SightPath was founded in 1998 by Massachusetts Institute of Technology professors and computer industry veterans. Its chief executive, Jim Ricotta, will join Cisco's Content Services unit.

The company shares its roots with Open Market Inc., a maker of electronic-commerce software based in nearby Burlington.

MIT computer science professor Dave Gifford, a co-founder of SightPath, co-founded Open Market in 1993. SightPath Chief Technology Officer and co-founder Jim O'Toole was formerly senior software architect at Open Market.

Customers of SightPath include USinternetworking Inc., which rents software to businesses through the Internet, and advertising agency MVBMS/Euro RSCG.

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