Cisco plans announcement to 'change the Internet'

Posted March 9, 2010

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— Networking giant Cisco (Nasdaq: CSCO) will unveil news Tuesday that it says “will forever change the Internet.”

The company is touting the news as an "adrenaline boost" for the Net.

"Change is about to set your network's pulse racing in 3... 2... 1...," Cisco Web site read Tuesday morning.

"Cisco's next innovation will help service providers prepare for the future by delivering anywhere to anywhere experiences."

Shares in Cisco rose Monday on other news as well. JP Morgan initiated coverage of the stock with an "Overweight" rating.

Near Monday's close, Cisco shares gained $1.15, or 4.5 percent, at $26.36 – a 52-week high in heavy trading. More than 116 million shares were traded, close to three times the daily volume of 47 million. Cisco closed at $26.13.

Cisco wouldn’t disclose details about the announcement, which is set for 10 a.m. EST.

However, reports have circulated that Cisco plans to announce its own broadband plan to counter Google’s ultrafast plan for a 1-gigabit speed network.

MarketWatch reported Monday that several analysts believe the Cisco announcement will focus on mobile data solutions rather than landline broadband networks.

"The single largest opportunity in networking today on the carrier side is in mobile networking," Yankee Group analyst Zeus Kerravala said, according to MarketWatch. "Starent was a key acquisition for them,” he added, referring to Cisco’s recent acquisition of Starent, which makes equipment for mobile networks.

MarketWatch added that Cisco may be working with major wireless providers such as AT&T and Verizon Wireless.

"Cisco is standing by its (service provider) customers and promising higher speeds," said Rajan Varadarajan, an analyst at Primary Global Research LLC, according to Dow Jones news service.

Cisco said the news will affect “consumers, businesses and governments.”

Cisco will provide a live Web cast of the announcement at 11 a.m.

According to the Financial Times, Cisco is working with service providers such as AT&T, Comcast and Verizon. Reuters reported a similar story.

On Sunday, JP Morgan put out a note to clients reinstating coverage of Cisco. Analyst Rod Hall also pointed to the expansion of mobile data usage as something that will benefit Cisco. In addition, the trend towards "virtualization," or having one physical computer act like many with the help of software, points toward increased traffic in data centers.

Hall said his analysis implied that investors are pricing in 3.8 percent year-over-year revenue growth for Cisco in perpetuity.

"Given the positive trends Cisco participates in, we believe that this is overly pessimistic – even in a scenario in which the economy continues to decline," Hall wrote. He put a $28 price target on the stock for December.

Cisco employs more than 4,000 people at its campus in RTP.


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  • Here kitty kitty Mar 9, 2010

    I don't drink coffee I drink tea. And because of Obama all the paper holders for tea are in short supply because of all the paper tea-holder parties. (I got redflagged for using bags after the word tea. UNBELIEVABLE!!!)

  • Here kitty kitty Mar 9, 2010

    I was kinda wondering how Algore felt about this, too. He might want to put it in a lockbox.

  • TheAdmiral Mar 9, 2010

    I know I know -

    They are going to announce that they will be hiring people who submit their resume and application by the internet!

  • wildcat Mar 9, 2010

    Good. Maybe then it will reach everyone that desires to have access to the web.

  • my.02 Mar 9, 2010

    good, give me something other and time warner cable internet. something faster and cheaper.

    embark is horrible
    no vzw at my house
    TW is my only option

  • durham_nc Mar 9, 2010

    nerdlywehunt, Verizon offers DSL for $20/month

  • nerdlywehunt Mar 9, 2010

    How about an affordable service to the home for starters. In most every other country high speed internet is available to alomost everyone for the equivalent of $10-15 per month...............we are getting ripped again..............

  • nerdlywehunt Mar 9, 2010

    Does this mean the Federal Government is trying to deny coverage? Sounds like the insurance companies that are so disliked by the BO administration.
    posted by southern wisdom

    At least Gore could spell "the internets" and "the google" unlike the former President Bushey........

  • Nunya123 Mar 9, 2010

    VariousGood - great post.

  • Cragsdale Mar 9, 2010

    nope, no expectations my friend. just making sure. :) one can never be 100% sure on Golo anymore. I am however going to cruise through those two links, I do so enjoy additional knowledge when it comes to the internet :)