Cisco touts collaboration, Web 2.0 as earnings rise

Cisco reported strong fiscal fourth-quarter earnings, and boosted its guidance for the year, driven by emerging video, collaboration and Web 2.0-style applications that CEO John Chambers said are increasing the demands placed on enterprise and carrier networks.

On Tuesday, Cisco reported quarterly net income of $1.9 billion or 31 cents per share. Quarterly sales were $9.4 billion, up 18 percent from a year ago with fiscal year revenue reaching $34.9 billion, up 23 percent from fiscal 2006.

By Wednesday afternoon, the markets had reacted strongly to Cisco’s news, pushing its shares above $32, a 52-week high for the stock. Overall, Cisco shares are up more than 75% over the past year.

Cisco CEO Chambers made a note of touting the potential of emerging Web applications, including video delivery, Web-based collaboration and so-called Web 2.0-driven Web sites, to usher in a second wave of Internet-driven growth for the vendor.

In addition to its usual acquisition binge on vendors to help flesh out its network business (SpansLogic, NeoPath and IronPort), Cisco this year has also acquired social networking providers (Five Across and Tribe.net), a videoconferencing/collaboration vendor (WebEx) and an XML integration gateway provider (Reactivity)—signaling with real dollars its belief in the future of Web 2.0.

“We expect to do with Web 2.0 technology what we did with the Internet,” Chambers said in a conference call announcing the earnings. “The Internet had been around for years, and we took it and used it to transform our own business to improve productivity. We’ll do the same thing with collaboration technology.”