Cisco Bets on Web Video

WSJ writes:

Mr. Chambers predicts the demands of video will transform the Internet over the next decade. Network traffic should increase fourfold to sixfold annually, instead of the 100%-a-year gains now seen in the U.S. and Europe, he says. Beyond the heavy traffic is the technical challenge of moving video, Mr. Chambers says. “Making work is really, really, really difficult.”

Scientific-Atlanta’s products help Cisco expand its offerings by bringing it closer to the consumer market for movies and other videos. The set-top box becomes a valuable piece of real estate as video becomes more widespread, Mr. Chambers says.

Cisco’s recent $61 million purchase of Kiss Technology AS, a Danish consumer-electronics company, was in anticipation of a push into video like the one with Scientific-Atlanta. Kiss “may have been one of the most aggressive moves we made,” says Mr. Chambers.

Kiss makes an Internet-connected device for the European market that can play DVDs on television sets, play Internet radio and download weather reports, stock quotes, and other video. Cisco says it is preparing to roll out new products for the European market from the acquisition. They include a new DVD player with an internal hard-disk drive for storing video downloaded from the Web.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.