Proxim buys networking company for $14 million

Wireless company Proxim Technologies spent $14 million today to acquire Farallon Communications, maker of technology that allows Apple Macintoshes and PCs to network together.

Farallon, which spun off from Netopia in 1998, builds a variety of networking kits that allow consumers and small businesses to network their computers together and share a single Internet connection.

Farallon sells phone-line networking kits that let people connect their computers together simply by plugging them into already installed phone jacks. It also sells wireless networking kits and traditional Ethernet technology that allow people to network their computers by stringing cables between them. Farallon's products allow PCs to network with Macintoshes.

"The phone-line networking products are popular, and it makes sense for Proxim to want that in their portfolio," said Yankee Group analyst Karuna Uppal. "Farallon has focused on the small office and education markets, and Macs are huge in education."

Analysts say today's acquisition beefs up Proxim's product family, allowing it to better compete in the growing market for networking kits in homes, small businesses and schools.

Proxim historically has sold only wireless networking products to consumers and businesses, allowing laptop owners to work untethered in the home or office, for example.

Company executives say Proxim will continue to use Farallon's name in its products.

Proxim and Farallon, however, support different wireless standards in the home. Proxim, along with Intel and others, support a wireless standard called HomeRF that runs about five times slower than another wireless standard called 802.11B. Farallon, 3Com, Cisco Systems, Nortel Networks and others support 80.211B in the home.

"Both can coexist, we think," said Kurt Bauer, Proxim's vice president of marketing.