In what looks like a publicity stunt, two-year-old startup SalesCrunch just made Cisco an unsolicited offer for WebEx, the web conferencing business Cisco acquired for $3.2 billion back in 2007.SalesCrunch wants to pay Cisco $1 for WebEx — plus a 15% equity stake in SalesCrunch.
Yes, the offer is for real, we’re told. And we love the gutsy fun of it, even though we can’t imagine Cisco will.
SalesCrunch had previously approached Cisco but the talks didn’t get far, founder and CEO Sean Black told Business Insider.
“We met with them about six months ago in San Francisco,” he recalls. “It quickly became clear that the only way to get them to take our offer seriously is to bring it to the attention of the shareholders.”
Because SalesCrunch is genuinely offering a 15% stake, Black believes Cisco is “going to have to talk about it now. The board is going to have to have a conversation,” he says.
When Cisco hit troubled waters in 2011, rumours circulated that it was looking to unload WebEx, even though Cisco offered a limp-wristed denial at the time. This gave Black the idea that Cisco would be willing to sell.
SalesCrunch is a WebEx competitor, known for its management tools. It’s browser-based meetings don’t require a download or plug in. Plus it documents everything from who is using the service at any given time to which meeting participants are secretly answering e-mail.
(Disclosure: Business Insider is a customer of SalesCrunch, though the SAI editorial staff doesn’t use it.)
Cisco has already met its promised goal to cut $1 billion in expenses and has declared its restructuring is over. It posted overall growth in its last quarter, too. So it doesn’t need to shed more business units — even an oddball business for it like WebEx.
Cisco consistently points to its Collaboration unit — of which WebEx is a member — as a key area for its future. The Collaboration unit posted over a $1 billion in net sales in its last quarter, up from $952 million in the year-ago quarter. That makes it Cisco’s third-largest business unit.
Cisco doesn’t break out WebEx’s results, but Black from SalesCrunch estimates that it could be doing about $600-$700 million in revenue per year. This is based on the $380 million of revenue in 2007 when Cisco bought it and assumes 15% growth, which Black says is typical for the web conferencing market overall.
Since launching in April 2010, SalesCrunch has done well, accumulating 10,000 users across about 30 enterprise customers including Yelp, CareerBuilder and Jive, says Black.
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