The Five Dumbest Things on Wall Street This Week
|Chambers of Arabia
Cisco and the Connected Kingdom
5. Prophet MarginCisco (CSCO) is ready to strike black gold.
With the price of oil soaring into the low $70s, Cisco said Tuesday it would invest $265 million over five years in Saudi Arabia. Cisco plans investments staffing, leasing and finance, innovation hubs, public-private partnerships, education and philanthropy.
The Arab nation is the world's 29th largest economy and proud owner of a quarter of the world's oil reserves. But that's not what appeals to the San Jose, Calif., company's big-picture CEO, John Chambers (pictured at right).
"Saudi Arabia is experiencing a transformation as it expands its economic growth opportunities into new sectors using information technology," Chambers says. "Today's announcement of our investment plans in Saudi Arabia reflects our alignment with the country's focus on entrepreneurship, innovation and education, which we believe will help drive the 21st century global economy."
Entrepreneurship and innovation may not yet be synonymous with Saudi Arabia. For now the kingdom may be better known for sex segregation, corporal punishment and religious restriction. But as always, Chambers is seeing well into what is certain to be a bright and profitable future.
"As Saudi Arabia transforms itself into a Connected Kingdom, it is well-positioned to leapfrog more traditional markets in terms of technology adoption," Cisco's press release blares. "A recent Momentum Research Group study aimed at measuring the productivity effect of IT compared government and healthcare operations and services in Saudi Arabia to countries in Europe. The study found that Saudi Arabia was leading European countries in several areas, including the adoption of new technologies such as IP telephony and voice over IP and had a larger increase in the number of citizens using their services."
Let no one accuse Cisco of repressing the profit motive.Dumb-o-Meter score: 75. Who knows, Chambers may call oil Texas Tea.
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