Cisco Buys Linksys to Tap Home Nets

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Cisco Systems Inc. opened a big door into home networking with last week's deal to buy The Linksys Group Inc. for $500 million in stock.

The deal is expected to close in the fourth quarter.

It's a big move into consumer home networking for Cisco, which up to now has targeted its networking products to larger enterprise customers. Linksys holds the top position in consumer and small-office/home-office networking products, garnering a 39 percent market share in North America.

Linksys also snagged one of the first CableHome 1.0 certifications for a home-networking gateway during the last testing round at Cable Television Laboratories Inc. And last year, it struck a deal with then-AT&T Broadband to provide home-networking gear for a trial in Seattle.

Linksys had $429 million in 2002 revenue, up 24 percent over 2001, fueled by broadband gains.

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