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Cisco Makes IP Video Buy

SAN JOSE, California ( TheStreet) -- Cisco (CSCO) has busted another video move, announcing plans to acquire content management specialist ExtendMedia.

The privately-held software maker helps service providers deliver video-over-IP networks, according to a statement released by Cisco before market open.

"As the video market transitions and consumers expect multi-screen engagement, service providers are enhancing their infrastructure to manage and deliver video to any device," explained Enrique Rodriguez, senior vice president of Cisco's Service Provider Video Technology Group. "ExtendMedia will strengthen Cisco's position in the delivery of IP video services by enabling service providers to provide a more interactive and personal experience."

Typically, ExtendMedia's technology is used to manage video content for ad-supported Web sites, and the Newton, Mass.-based firm has already worked with AT&T (T) and Bell Canada.

Cisco, of course, already provides much of the networking backbone needed to support increasingly complex smartphone services. During the recent conference call to discuss the company's fourth-quarter results, Cisco CEO John Chambers explained that the firm's service provider business grew in the 'mid teens' during the quarter.

The tech bellwether has been making a major push into video, acquiring Norwegian videoconferencing specialist Tandberg for $3.41 billion last year, which followed the $590 million purchase of Flip camera maker Pure Digital.

Cisco has also predicted a home entertainment revolution, which he says will see the words of TV and Internet collide.

Financial terms of the ExtendMedia deal were not disclosed, although Cisco expects to close the transaction in the first half of its fiscal 2011.

Cisco shares were up a penny, or 0.05%, to $21.22 shortly after market open, as the Nasdaq crept up 0.26%.

--Written by James Rogers in New York.

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