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shares were down 4% Friday on renewed rumors that the tech giant was veering down the dilutive merger and acquisition path.

The speculation apparently started after comments made by Cisco's media solutions general manager, Dan Scheinman, in a



Thursday. Scheinman said Cisco was looking around for the type of acquisitions that could feed more traffic into data networks and help stimulate new equipment sales.

Why the worry?

Well, right or wrong, Cisco is seen as one of the few safe bets in tech as weaker companies like





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fight sector slumps and stiff economic headwinds. By minding its own business selling routers and switches to network operators, Cisco's is a fair position to slog its way through the downturn.

The notion that Cisco would invite merger risk doesn't really stand up.

First, Cisco's words and actions rarely match when it comes to mergers. Its biggest recent deals like the $5.3 billion acquisition of Scientific-Atlanta in 2006 and the $2.9 billion WebEx buy in 2007, came out of the blue. Cisco has long sought a way to make something happen in new media and social networking, what CEO John Chambers calls the Web 2.0 economy. But these are merely a road builders aspirations for new frontiers to pave.

Second, deals as you may have noticed, have nearly screeched to a halt. It's no secret that the values of companies have been dropping with breath-taking speed. The thinking is: Why pay today's price when tomorrow's price will be lower.

Third, Cisco has been in cash conservation mode. You don't build a $29 billion savings account by scooping up other companies. Cisco has all of one acquisition this year, five last year and 11 in 2007.

Overdue? Maybe. Prudent? Definitely.