Cisco buys Flip digital-camera maker for US$590m

19 Mar 2009

Continuing its unstoppable march into the consumer electronics space, networking giant Cisco today acquired Pure Digital, the maker of the popular mass-market Flip Video brand.

The Flip Video devices (pictured), which enable consumers to take pictures and videos and share them instantly on the web, have sold more than two million units to date.

“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,” said Ned Hooper, senior vice-president of Cisco’s Corporate Development and Consumer Groups.

“Pure Digital has revolutionised the way people capture and share video with Flip Video. This acquisition will take Cisco’s consumer business to the next level as the company develops new video capabilities and drives the next generation of entertainment and communication experiences,” Hooper said.

Pure Digital’s Flip Video quickly demonstrated market appeal in the US by making video simple, accessible and fun.

All Flip Video products come equipped with FlipShare software that allows users to easily organise and edit videos, and then share them instantly on YouTube, MySpace and other popular sharing websites.

“Flip Video puts the power to instantly capture, edit and share video into the hands of everyday consumers,” said Jonathan Kaplan, chairman and CEO of Pure Digital.

Upon the close of the acquisition, the Pure Digital team will become part of Cisco’s Consumer Business Group, which includes Linksys by Cisco’s home-networking, audio and media-storage products. Kaplan will become general manager of the combined organisation, reporting to Hooper.

Cisco will pay approximately US$590m in stock in exchange for all shares of Pure Digital. In addition, it will provide up to US$15m in retention-based equity incentives for continuing employees.

The acquisition is expected to close in the fourth quarter of Cisco’s fiscal year 2009.

By John Kennedy