Cisco acquiring Flip Video-maker Pure Digital for $590 million in stock

Funny -- that patently absurd half a billion figure we heard tossed about earlier this month was low. In reality, Cisco has just announced its full intentions to acquire all of Pure Digital, the maker of the immensely popular Flip Video camcorder, for around $590 million in stock. According to Ned Hooper, senior vice president of Cisco's Corporate Development and Consumer Groups, the "acquisition of Pure Digital is key to Cisco's strategy to expand our momentum in the media-enabled home and to capture the consumer market transition to visual networking." To an outsider, the move may seem somewhat odd; after all, what's Cisco doing spending this much on a consumer product? Let's just say that uploading HD video requires loads of bandwidth, and Cisco's all about that. Expect the deal to close in Cisco's fiscal fourth quarter of 2009.

[RyleyinSTL @ Mar 19th 2009 9:07AM]

Why is this thing so popular? Can't my 5 year old A series in the back of my closet canon take video every bit as good?

[threegs @ Mar 19th 2009 9:12AM]

Yeah, maybe but let's see you put that canon in your pocket.

[barry99705 @ Mar 19th 2009 9:18AM]

Maybe, but these things are cheap enough to give to your middle schooler and if it gets broken, it's not so bad.

[RyanTV @ Mar 19th 2009 10:25AM]

Honestly, I don't want to see what a middle schooler would do with a video camera. These underaged over-sexed teens are out of control!

[superhobo @ Mar 19th 2009 9:08AM]

This is the first tiem I've heard of FlipVideo.

[kovidog @ Mar 19th 2009 9:13AM]

Lucky for Flip Video, especially in this market. They happened to catch one good product at the right time and go from an obscure nobody to 25% of the consumer video capture market in the matter of a few years.

[tekdroid @ Mar 19th 2009 9:56AM]

25%?
Consumer video capture market meaning USB pocket video cameras?
Sources?

[biggromeo @ Mar 19th 2009 9:15AM]

I love my flip video.

[James @ Mar 19th 2009 9:24AM]

Are they buying just the Pure Digital Division or Imagination Technologies as a whole?

Seems overly priced if it's just Pure Digital as they're just a pathfinder for the IMG IP.

But if it's the whole company, it's rather cheaper as their IP is in a huge range of current gadgets, including the iphone and many other top end mobiles

James

[justin.armstrong @ Mar 19th 2009 1:05PM]

No. thats PURE Digital you are thinking of - http://www.pure.com. This is Pure Digital Technologies - http://www.puredigitalinc.com/

[Thomas L Dowdy @ Mar 19th 2009 9:32AM]

Congrats to the team at Pure Digital! I am proud to have been associated with their success since they were our client for retail services at National In-Store! We were with them for the launch of their first product, a single use digital camera, many years ago.
$590 million!!! The guys at Pure D can take a few days off now.

[Sea Urchin @ Mar 19th 2009 9:34AM]

I don't think that companies that do not have much exposure to a regular consumer should venture into that field. Cisco mostly sells to corporations, no need to market or make product look good. Once you enter the consumer field you are faced with Apple, Cannon, Sony and such.

[tekdroid @ Mar 19th 2009 9:58AM]

well, Linksys didn't need to worry about making their retail Joe Consumer routers look good, and neither does Cisco now that they own them :p Har!

[Tarnation @ Mar 19th 2009 9:45AM]

Hmm... I guess Cisco wants us to transfer the videos from our cameras via some obscure command line driven interface. JK I wonder if they will somehow merge this with their linksys brand oh I know built in wifi for uploading straight to computers and web.

[Plaintiger @ Mar 19th 2009 10:10AM]

Flip Video has realized the epitome of what consumers want in video recorders: EASE & AFFORDABILITY & STYLE. That is what differentiates it from the rest of the feature-stacked videocams out there. You have to try one out for yourself to understand! Plus, I think it caught on fire when Oprah listed it as one of her favourite things.

[Pies @ Mar 19th 2009 10:57AM]

I don't see how this could possibly be good for either company. The only official explanation I could find was Cisco's senior vice president of Very Long Job Titles saying that the acquisition is to "expand [Cisco's] momentum in the media-enabled home and to capture the consumer market transition to visual networking", which translates to English as "gain market in video-related home electronics."

I don't see how this is even relevant to Cisco's business, in that I don't see how this could sell more networking equipment. I see how HD video gaining market share is good for Cisco, so maybe they just want to keep making those Flip cameras, but they're going to sell them much cheaper than Pure Digital.

Major fail IMO.

[Pies @ Mar 19th 2009 11:03AM]

If anything, Cisco should be buying something like Vimeo.

[ChiWax @ Mar 19th 2009 11:11AM]

Update your firmware/drivers while you can! Q.

[Oscar5453 @ Mar 19th 2009 9:13PM]

Oh o.k so you take away our free sodas and Gym for this?

BS!!

[LondonConsultant @ Mar 19th 2009 12:17PM]

This makes me I wonder if Sir Fred Goodwin recently joined Cisco and is leading their expansion...

[kwanbis @ Mar 19th 2009 2:26PM]

Why would CISCO want to buy a video camcorder maker? Videoconferencing?

[dandmcd @ Mar 19th 2009 5:19PM]

I really don't see this as a good thing for Cisco. This company is a one hit wonder with a pretty bad product done better even by the likes of Aiptek and RCA (Small Wonder is very nice). I don't see how this company is worth anything to Cisco, unless they know of a secret product in development that they wanted their hands on.

I really don't see the Flip gaining any more marketshare now that the big name camcorder companies have taken notice, and are making competing products, as well as cell phone companies improving their video recording functions. I think Cisco would have been better off trying to make a deal with Kodak or Panasonic.