Cisco wants a seat in your living room

Late last week, Cisco's $6.9 billion purchase of Scientific-Atlanta appeared to come out of left field to the uninformed (that would be us). But upon closer inspection, and with the benefit of blog hindsight, the expensive deal seems to make a good deal of sense for the networking giant as it expands beyond its traditional corporate market.

The roots of Cisco's reasoning go back to 2003, when it acquired home-networking company Linksys. Linksys, in turn, bought a small Danish firm called Kiss Technology, which manufacturers DVD players and recorders that can be connected to other devices and to the Internet. Together, these moves indicate Cisco's unmistakeable direction: into the home, with video piped in from the Net.

What about the cable companies, you might ask? Good question. Comcast and other major operators may have a lock on underground lines, but they have never quite been able to figure out what to do inside the home--the elusive "last mile," as it is known. Although Comcast should in theory be able to with on-demand programming, earlier this year it did a deal with TiVo, a company that many believe is on its last legs.

It is in this void that Cisco senses opportunity. As one News.com editor put it: "Imagine your Linksys wireless router talking easily to your cable box. The telcos and cable companies may own the pipes, but Cisco's got the spigot."

Blog community response:

"Cisco had been Internet guys. Now they are cable guys. Clearly they are going to merge the two so their new home boxes can drag content from everywhere and then send it around the home, wirelessly or otherwise. A big move."
--Perceptric

"This move seems to be an very intelligent move, as this helps Cisco to enter into the VoIP, modem and many other communication hardware equipments. Slowly but steadily Cisco is doing its expansion."
--Thoughts

"This move wasn't received well on the Street, but this definitely was a good buy. Cisco had to move towards the consumer, sooner or later. Cisco with this purchase stands to gain from the emerging TV over IP boom."
--The urge to merge