Cisco buys into audio and video

Cisco Systems (CSCO) once again has found itself in the enviable position of having money to burn.

Fresh off the purchase of DSL (Digital Subscriber Line) networking specialist NetSpeed, the firm plucked multimedia networking application company Precept Software, of Palo Alto, California, for $84 million in stock.

Cisco will exchange between 1.15 and 1.35 million shares for all outstanding shares of privately held Precept, with the transaction being accounted for as a pooling of interests. Cisco has maintained an equity stake in Precept since April of 1996.

The deal is expected to close next month.

In related news, Precept's CEO, Judith Estrin, will step in as chief technology officer at Cisco, replacing Ed Kozel, a nine-year Cisco veteran.

Kozel will continue at Cisco on a part-time basis as senior vice president of corporate development, and will continue to be a member of the company's board of directors. Cisco said it expects Kozel to return on a full-time basis within a couple of years.

Precept is part of an emerging market for client and server-based applications that can transmit audio and video over any IP (Internet Protocol)-based local or wide area network. Cisco said Precept software will be offered with its products for enterprise and service provider customers.