Cisco Systems is to buy online conference provider WebEx Communications for US$3.2 billion (NZ$4.6 billion) to sell collaboration tools to small and medium businesses.
Cisco will use WebEx's technology services to build a stronger combination of communications and collaboration platforms for business customers, says Cisco chief development officer Charles Giancarlo.
WebEx markets its technology as a subscription-based service that lets companies hold real-time or asynchronous data conferences over the internet, and share web-based documents and workspaces.
The boards of directors at both companies have approved the deal, so the merger now has to clear antitrust regulations in the US and other jurisdictions.
Acqiring WebEx will allow Cisco to go head-to-head with Microsoft in the collaboration technology field, some analyts say.
"This is as much about Cisco competing against Microsoft as it is about [buying] the collaboration technology," says Zeus Kerravala, an analyst at Yankee Group.
"It's a huge deal. Cisco has never had a hosted online delivery business before."