Bloomberg heard from sources close to Cisco that the networking equipment giant has hired Barclays to find a buyer for Linksys, the company's unit that makes networking products for home users. Details on how much Cisco is looking to raise with the sale of Linksys weren't shared, but it's anticipated to be less than the $500 million Cisco paid for it in 2003 because it is a mature consumer business with low margins.
Cisco wants to sell Linksys as part of its strategy to exit consumer businesses while expanding in corporate software and technology services. Chief Executive Officer John Chambers eliminated 7,800 jobs over the past year and closed businesses such as the Flip video-camera unit amid a slowdown in sales growth after a foray into consumer technologies backfired.
In addition to Linksys, Cisco also operates in the home market with its Scientific Atlanta set-top-box unit and with NDS Group Ltd., a software maker for paid-television channels used by British Sky Broadcasting Group, Canal Plus and DirecTV. Cisco bought NDS in July for $5 billion.