Cisco Systems Sends Lawyers After Microsoft to Damage Skype

Cisco (NASDAQ:CSCO) is attempting to convince a European Court to impose stricter conditions on Microsoft’s (NASDAQ:MSFT) acquisition of Skype as the two companies continue their battle over videoconferencing.

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The teleconferencing market is growing in popularity among consumers and branching out to mobile phones, making Cisco’s scramble to safeguard its market leadership crucial. Microsoft is planning to integrate Skype into its own products to enhance future Windows devices and software. Cisco is convinced that this deal would impede interoperability.

Rather than take the fight into the courtroom, rival players Polycom (NASDAQ:PLCM) and Citrix Systems (NASDAQ:CTXS) are choosing to devise more user-friendly solutions. Polycom, for example, is choosing to make their technology compatible with that of their competitors.

According to research firm Infonetics, the videoconferencing industry will likely grow in value to $5 billion by 2015, compared with $2.2 billion in 2010. Free chat services, such as Apple’s (NASDAQ:AAPL) FaceTime, Google+ (NASDAQ:GOOG), and Facebook’s chat service, a joint venture with Skype, have facilitated meetings at the workplace and have even become a part of everyday life.

But the fact that many of these services are incompatible with each other is holding back growth. Skype users can’t call someone using Polycom, Facebook readers can’t videoconference with people using Apple’s FaceTime, and so on.

Cisco’s issue with the Microsoft/Skype deal that closed in October is that Microsoft will be able to lock in businesses that want to reach Skype’s 700 million account holders if it integrates the acquired technology exclusively into its Lync Communications Platform.

Many analysts claim that Cisco could lose its dominant position if Microsoft does well in acquiring Skype, a tool that millions of consumers use worldwide. Microsoft’s purchase of Skype may be a brilliant move, but whether Microsoft will use Skype to its advantage has yet to be seen. Cisco does not want to lose this case, and will fight hard to dictate terms of coexistence of multiple systems.

Here’s how these stocks closed the day:

Cisco Systems, Inc. (NASDAQ:CSCO): CSCO shares recently traded at $19.88, down $0.32, or 1.58%. They have traded in a 52-week range of $13.30 to $20.49. Volume today was 46,229,212 shares versus a 3-month average volume of 44,762,700 shares. The company’s trailing P/E is 15.43, while trailing earnings are $1.29 per share.

Microsoft Corporation (NASDAQ:MSFT): MSFT shares recently traded at $31.74, down $0.13, or 0.41%. They have traded in a 52-week range of $23.65 to $31.93. Volume today was 59,323,319 shares versus a 3-month average volume of 54,988,500 shares. The company’s trailing P/E is 11.50, while trailing earnings are $2.76 per share.

Polycom, Inc. (NASDAQ:PLCM): PLCM shares recently traded at $20.65, down $0.16, or 0.77%. They have traded in a 52-week range of $14.45 to $34.30. Volume today was 2,410,615 shares versus a 3-month average volume of 2,322,620 shares. The company’s trailing P/E is 27.53, while trailing earnings are $0.75 per share.

Citrix Systems, Inc. (NASDAQ:CTXS): CTXS shares recently traded at $74.74, down $0.11, or 0.15%. They have traded in a 52-week range of $50.21 to $88.49. Volume today was 1,651,488 shares versus a 3-month average volume of 2,033,120 shares. The company’s trailing P/E is 39.97, while trailing earnings are $1.87 per share.

Apple Inc. (NASDAQ:AAPL): AAPL shares recently traded at $542.44, up $7.03, or 1.31%. They have traded in a 52-week range of $310.50 to $535.41. Volume today was 33,973,308 shares versus a 3-month average volume of 14,034,300 shares. The company’s trailing P/E is 15.44, while trailing earnings are $35.14 per share.

Google Inc. (NASDAQ:GOOG): GOOG shares recently traded at $618.25, down $0.14, or 0.02%. They have traded in a 52-week range of $473.02 to $670.25. Volume today was 3,136,837 shares versus a 3-month average volume of 2,873,330 shares. The company’s trailing P/E is 20.77, while trailing earnings are $29.76 per share.

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To contact the reporter on this story: Diallah Haidar at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com