Newsmaker: Cisco's acquisition guru speaks out

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So what is Cisco's involvement with MovieBeam? Is this just an investment or does Cisco have more of a strategic relationship with it?
Scheinman: We also have a relationship on the device level. Today, the MovieBeam box is a home-grown device. Now, it will be branded Cisco. But ultimately we hope that MovieBeam will be a service that resides on a Cisco box. At the end of the day, Disney and MovieBeam don't really care about making hardware. They are hopeful that we'll do that.

The key for us is that we get access to recently released, first quality movies. And this is one of the only ways to get access to newly released movies legally without buying or renting the physical DVD.

Today, the service is delivered over spectrum via the airwaves. But if the service is successful and expands, we see it migrating to an Internet service. We think we can really add value here. So, we're very excited to be a partner with Disney as it launches the service. And we're excited to be partners with Intel and the other investors.

Cisco is getting ready to close the $6.9 billion acquisition of Scientific-Atlanta in the next few weeks. Can you explain the thought behind that purchase?
Scheinman: Linksys already gave us a gateway into the home through a retail channel, but Scientific-Atlanta gave us a new sales channel into the home through a service provider. Scientific-Atlanta also gave us video expertise. We've been saying for a long time that data, voice and video would ride over one network. We looked at our offering and said, "What are we missing? Video."

So we began to look at what our options were in video. Scientific-Atlanta is a leader, and it became the clear choice for us.

Did you guys ever think of TiVo?
Scheinman: We look at everything. But we can't comment on public companies.

Now that Cisco has Scientific-Atlanta, which gives you a cable set-top box and DVR, and you have Kiss Technologies, which gives you a consumer electronics device in the home, what's next? What is the next hole in the portfolio that needs to be filled?
Scheinman: It's going to be interesting for us is to see where the future takes us. One of the things that we've got to do is scale Scientific-Atlanta to enter the telco TV business in Europe. That's very important for us. I think you're going to see us expanding our European presence. Kiss helps a lot because they were based in Denmark, and they already have hundreds of thousands of users of their device in Europe. That's No. 1. No. 2 depends on what happens in the industry. If telco TV takes off, there's going to be a lot of demand for a lot of new stuff.

Whether we move tomorrow or we wait a little bit to see how the market breaks out, it's going to depend. I would say that the thing that I'm really encouraged by is the speed at which all parties are moving. We see cable moving incredibly rapidly to build triple- and quadruple-play services. The phone companies are also moving at light speed. The same kind of thing is going on in Europe. But I think we have a little bit of time to figure out and make sure we know where the gaps are so we can make the right decisions.

As Cisco moves into the consumer market, will the company do more partnerships and investments like the MovieBeam deal or more acquisitions like Kiss or Scientific-Atlanta?
Scheinman: If we are successful, there are going to be some things that you'll see. No. 1 is, you'll see us partner with the content industry. And I mean that very broadly, so it could mean a deal with someone like Comcast for example, which has a lot of its own content.

No. 2 is we'd like to be able to work very closely with the service providers to be able to offer differentiated offerings. You're going to see us get engaged with trying to help our service provider partners deliver new services to their customers.

No. 3 is, you will see us be aggressive and make acquisitions in terms of what's next. There are no obvious large targets today, but I think there's a lot in the start-up world that looks exciting to us. And you may also see us develop partnerships in Europe that will help Scientific-Atlanta scale its business there.

How much of your team's time is spent looking at acquisitions in the consumer part of the business and how much is spent looking for deals in other parts of Cisco's business?
Scheinman: I would say that right now we are spending about a third of our time either looking at investments, acquisitions or partnerships in the consumer or service provider space.

What about the other two-thirds?
Scheinman: There's a lot going on in the enterprise with the virtualizations of the data center. We're also looking at our existing businesses and how they can grow. And there's the small and medium business market, which we call commercial. That is very exciting, too.  

More Newsmakers

[cohaver]

Open source(mythtv) in set tops

Best thing Cisco could do is make a smart boxs now
that does more than just email and search .
Adding the easy channel links of a TV channel Icons could be sub channels selling these channels spaces like comcast or even selling this service to comcast a another way to make money.
Smart move Tivo is a dead product open source software will replace it soon. After 10 years in the broadband services and into out people homes installing theses services. Like the digital headend in the sky.Cisco could channel retail units replacing Google and making money by sub linking to end entertainment units . How this work if you were on say the Fox Network you could use your remote to search all of Fox movies and download at fee. The key here is easy to use.
your set top box would have a search engine on tv channel or even icon that link to retail links .

[TogetherinParis]

Selective Commercials

Hi. I'm never going to buy a pick-up truck or a box of tampons.
I'll watch commercials for stuff I want or stuff you want me to
buy (or let them run on my set) if I can see what I want while
doing so. I might pay for commercial free viewing occasionally,
but I want to watch obscure old and new lectures (statistics,
medical anatomy, physiology scientific talks, entomology, etc.),
too, & get real educational credit for it.

I'd also like to contribute obscure lectures digital camera content
that others might want to see, too, that can be keyed to what
others might want to see. All video needs a time/date/place/
direction stamp on it to be databased & availability rewarded.
Dang. Did I just invent the GPS clock date compass video
recorder? Hop to it, dudes. We need to make these
connections.

[TogetherinParis]

Selective Commercials

Hi. I'm never going to buy a pick-up truck or a box of tampons.
I'll watch commercials for stuff I want or stuff you want me to
buy (or let them run on my set) if I can see what I want while
doing so. I might pay for commercial free viewing occasionally,
but I want to watch obscure old and new lectures (statistics,
medical anatomy, physiology scientific talks, entomology, etc.),
too, & get real educational credit for it.

I'd also like to contribute obscure lectures digital camera content
that others might want to see, too, that can be keyed to what
others might want to see. All video needs a time/date/place/
direction stamp on it to be databased & availability rewarded.
Dang. Did I just invent the GPS clock date compass video
recorder? Hop to it, dudes. We need to make these
connections.