Word: cisco
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Dates: during 2000-2009
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...That's why technology, Internet and biotech stocks--the new economy--have been soaring the past few months. But that's also why last week, when investors felt that expectations had got out of hand in the face of higher interest rates, the new-economy stocks sold off heavily, Cisco among them...
...Cisco finished the week behind Microsoft--the difference between them was about $2.40 on Cisco's share price--and no one knows what last Saturday night's breakdown of settlement talks will do to Microsoft's stock. But none of this alters a fundamental transformation as we move from a computer-based economy to a communications-based economy--one in which you don't need PC power at your fingertips anymore because you can reach it instantly via the Web. "Many years ago people had trouble understanding what drove political issues," says Cisco CEO John Chambers. "It was the economy...
...Cisco's rise signifies a new phase of the technological revolution. Microsoft ruled the first phase, marked by decreasing microprocessor costs and cheaper data storage, which made the PC a household appliance. That confluence of technologies resulted in cell phones, game platforms, pagers and a host of other smart devices that are now in place...
...which helps explain how Cisco got here. But will it continue to grow at a 50% annual rate? It took just 10 years for Cisco to go from start-up level to most valuable company in the world. That alone is a commentary on the pace of change in today's economy. The Internet has grown from a $5 billion business five years ago to a $500 billion one today, with annual growth rates of 50%. And in some sense, Cisco is the beneficiary of a virtuous cycle, so to speak, in which the very innovations that make...
Chambers likes to talk in terms of dog years. One human year is equal to seven Internet years. Even the folks at Cisco admit that in this technological revolution they will have to maintain a state of perfect paranoia to stay ahead. Cisco is facing tough competition in the telecom-equipment business, where longtime powerhouses Lucent and Nortel enjoy established expertise and relationships with key customers. "It's one thing to build a network the size of a corporation," says a skeptic, Nortel ceo John Roth, "but it's another to build one the scale of a whole nation...