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Cisco Acquires On-Demand TV Company

Cisco Systems has announced that it will purchase a private on-demand television company for $92 million this week. This is seen as a move that will fulfill the network-gear maker`s strategy to offer television, movies and other video on the Internet. Arroyo Video Solutions Inc. says it is a company "revolutionizing the way people watch TV." The California-based company develops software that allows computer servers to store and send digital video, rather than stocking the data on disks.

"It fills a spot in the video distribution network and it buys Cisco a wonderful piece of technology and a good host of really good people," Eve Griliches, research manager at analyst firm IDC, said of the buy-out. Cisco will conduct a high-level marketing campaign to make average Internet users aware of the brand.

The acquisition will be completed by October 31, once approved. It should ease Cisco`s routers, switches and other networking products to store, send or receive streaming video online. Cisco, and other such companies, want to target on-demand video distribution due to the rising trend of Internet users viewing video online. Cisco`s last quarterly report showed sales of $7.98 billion for routers, switches and other networking gear.