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Cisco adds two to its fold
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March 16, 2000: 2:07 p.m. ET
Most recent buys bolster presence in wireless, Internet appliance markets
By Staff Writer Richard Richtmyer
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NEW YORK (CNNfn) - Adding to its growing list of acquisitions, Cisco Systems on Thursday said it would buy two privately-held companies for roughly $501 million in stock.
The newest additions to its fold will help Cisco (CSCO: Research, Estimates), the world's largest supplier of computer-networking equipment, extend its reach into the markets for Internet appliances and wireless communications products.
The San Jose, Calif., company said it would buy InfoGear Technology of Redwood City, Calif., for roughly $301 million in Cisco stock. InfoGear, which employs 74, makes hardware and software used in "information appliances," low-cost computing devices that are designed to carry out specific functions, such as Internet access.
Currently, InfoGear's main product is the iPhone, a combined telephone and Internet terminal that allows users to browse the Web and manage other appliances from remote locations.
 While Thursday's acquisition news was run-of-the-mill to most Cisco watchers - executives have said they expect to make as many as 25 deals this year - the company's decision to buy InfoGear, more consumer-oriented business, was a little out of character, according to Michael Neiberg, an analyst at Chase H&Q.
"This investment is only a couple of hundred million, which is really nothing for them," Neiberg said. "But this does appear to be more a of a residential-type of product, which is surprising."
Cisco's products are mainly used in corporate and Internet network infrastructures, and the company has not had a big presence in the home.
InfoGear will operate under Cisco's small and medium business line and continue to be led by Ed Cluss, its current chief executive, the company said in a statement. Cisco said it plans to use InfoGear's technology to give its customers the ability to remotely manage and upgrade information appliances from a central location and deliver customized content.
Separately, Cisco said it would buy JetCell of Menlo Park, Calif., for roughly $200 million in stock. That company, which was founded in 1998 and employs 46, develops communications systems that permit wireless network communications within an office building.
In connection with the JetCell acquisition, Cisco said it expects to record a one-time charge against after-tax earnings of up to 3 cents per share for purchased in-process research and development.
JetCell's operations will be folded into Cisco's enterprise business line, the company said.
Chase H&Q's Neiberg said that because the acquisitions announced Thursday are so small in comparison with Cisco's broader business, he does not expect them to have any impact on the company's earnings.
Executives at Cisco did not immediately return phone calls seeking further details.
In early afternoon Nasdaq trade Thursday, Cisco shares were down 11/16 at 127-15/16. 
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