Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Cisco Makes Two Big Acquisitions to Take on Zoom

By Danny Vena - Dec 7, 2020 at 1:11PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Zoom has been eating Webex's lunch. Now Cisco is fighting back.

Cisco Systems ( CSCO 1.82% ) announced on Monday that it is making two acquisitions to help improve the functionality of its WebEx videoconferencing, collaboration, and customer service platform. The networking giant is paying an undisclosed sum to acquire audience interaction platform Slido. The technology company provides tools that help moderate large groups, and "enables real-time feedback and insight before, during and after any meeting." Slido has features that allow viewers and meeting participants to ask questions, answer polls, and participate in quizzes, among others. The Motley Fool regularly uses Slido for its events. 

Slido boasts over 7 million participants each month and will continue to be available for use by competitors. "Cisco understands the value in continuing Slido as a stand-alone product and building great integrations with other virtual meeting and presentation platforms like [Microsoft ( MSFT -0.34% )] Teams, Zoom ( ZM -2.90% ) and [Alphabet's ( GOOGL 0.79% ) ( GOOG 0.85% )] Google Meet," said Juraj Pal, Slido's product head. 

A person participating in a video conference with four participants.

Image source: Getty Images.

The tech giant also revealed plans to acquire IMImobile, a cloud communications software and services company, for roughly $730 million. IMImobile allows organizations to communicate with their customers across various channels, including social media, messaging, and voice. The company will become part of WebEx to further Cisco's contact center-as-a-service (CCaaS) platform. The company will use the platform's omnichannel capability to allow businesses to better connect with their customers.

Zoom has become the de facto industry standard for video conferencing since the rise of the pandemic earlier this year. In the third quarter, its revenue grew 367% year over year. At the same time, the number of customers contributing $100,000 or more in trailing-12-month revenue grew 136%, while the number of customers with more than 10 employees grew 485%. This marked the third consecutive quarter of triple-digit revenue growth for Zoom, eating into Cisco's market opportunity.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Cisco Systems, Inc. Stock Quote
Cisco Systems, Inc.
CSCO
$56.03 (1.82%) $1.00
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$328.95 (-0.34%) $-1.13
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,843.36 (0.79%) $22.33
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,856.36 (0.85%) $24.00
Zoom Video Communications Stock Quote
Zoom Video Communications
ZM
$191.99 (-2.90%) $-5.72

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
635%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/02/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.