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Ericsson ups stake in Juniper Networks

The high-end start-up gets the attention--and dollars--of several companies in the networking industry, but now no one has as large a stake as wireless giant Ericsson.

High-end start-up Juniper Networks has garnered the attention--and dollars--of several companies in the networking industry, but now no one has as large a stake as wireless giant Ericsson.

Ericsson today increased its investment in Juniper, enough to gain a seat on the company's board. Terms of the additional stake were not disclosed.

"It's a significant increase over our existing investment," said Mike Thurk, vice president and general manager of Ericsson's datacom networks division. Thurk will sit on Juniper's board as part of the deal.

Juniper has developed a sought-after high-end routing device that can speed packets of information based on Internet protocol (IP). The technology is thought to represent a huge opportunity for various start-ups, as well as entrenched companies such as Cisco Systems, as phone carriers and new-age service providers build out their networks.

In addition to Ericsson, Juniper has filled its coffers with more than $60 million in funding from various venture capital firms, as well as Lucent Technologies, 3Com, Nortel Networks, the alliance of Newbridge Networks and Siemens, and the UUNet arm of MCI Worldcom.

The latest Ericsson funding gives the company the largest non-venture chunk of Juniper, according to executives.

The undisclosed stake isn't without precedent. Telecom and data equipment provider Nortel Networks holds a 20 percent stake in another high-end start-up, Avici Systems, for example.

Ericsson will also resell Juniper's M40 routing device through its worldwide sales channel, giving the Silicon Valley company a boost in international markets. Juniper's router has been shipping since last fall.

The two firms also inked a deal to cooperate on research and development in the areas of voice and IP-based networking, according to the companies.

Ericsson has been very vocal in its efforts to gain access to data networking and Internet technologies through acquisitions, but Juniper executives said they want to remain autonomous as long as Juniper can be successful.

"Our company goals are to stay independent," said Joe Fergerson, vice president of marketing for the company.