Stockpickr: Who's Next on Cisco's Buy List?

Cisco(CSCO Quote) is basically saying it's a buyer with its deal to acquire WebEx(WEBX Quote). With that in mind, I compiled a list of cheap tech companies that overlap in interesting ways with Cisco's strategic objectives, and I set them up in a portfolio on Stockpickr called Who Will Cisco Buy Next?.

Cisco has always built itself through acquisitions. Its original growth story is a thing of beauty. Imagine it this way: Let's say everyone in the world lived on a one-person island. One day a group of bridge builders came along and built bridges for everyone. They had the monopoly, because they sold bridges to everyone. Everyone! That was Cisco with its original routers that one by one connected computers to the Internet all through the '90s.

The cash flows from that business gave Cisco the means to buy other companies, often start-ups for tens of billions, allowing Cisco to quickly become the leader in various other segments of the communications industry. In particular, it bought several fiber-optic startups that allowed it to compete in the broadband bandwidth space. Cisco also bought WiFi startups that got it into last-mile broadband connectivity.

More recently, with the acquisition of WebEx in particular, it looks as if Cisco is taking a different tack: buying established leaders in industries that can extend its services through the corporate enterprise.