(Updated with comment from Cisco)
The New York Times reported the story first here.
Cisco’s acquisition of the small San Francisco-based Tribe’s technology is the third purchase within a month — and is significant because it reveals a great ambition by the giant router company to move into new areas of the Internet economy. The latest acquired properties — including Five Across and Reactivity — allow consumers to interact in new ways. They facilitate sharing and communication of video and other content — and drive more traffic over the Web. This benefits Cisco because it means growth for its existing business of supplying Internet equipment, such as routers.
Tribe is relatively small, had struggled of late, and was popular primarily among 20-somethings in urban areas like San Francisco and visitors to the Burning Man festival in the Nevada desert. Tribe.net will live on as an independent site, under the direction of founder Mark Pincus. However, Cisco will acquire the company’s technology and most of its eight employees — and will use it to help Cisco’s corporate clients build their own versions MySpace and YouTube.
One clarification of the NYT story. We’ve been following the Tribe story, and know that Pincus had sought to do things like build networks for third-parties, and in fact had talked with Bono’s antipoverty campaign, One.org about building a network for it. However, after Pincus departed as CEO, the new CEO rejected the deal, in an effort to push Tribe as a destination site. Bono’s network now has 2.5 million members, and as the NYT notes, it was won by Yahoo.
Pincus returned last year in an effort to save Tribe. Rumors are the Cisco purchase was in single-digit millions, which makes it likely less than the amount invested in Tribe (at least $9.5 million across two rounds from Mayfield Fund and others).
Notably, Marc Andreessen, Netscape co-founder and now co-foudner of Ning, a site that lets people build social networking sites (and thus a competitor to Cisco) takes a swipe at the router giant: “The idea that Cisco is going to be a force in social networking is about as plausible as Ning being a force in optical switches,” he tells the Times.
Update: Eric Chan, head of strategy and marketing for the Cisco “Media Solutions Group,” the unit leading Cisco’s Web 2.0 offensive, said the Tribe technology complements Five Across’. While Five Across builds white-label social networks for corporate clients, Tribe’s technology is stronger in helping users discover new relationships. Chan said there will likely be more announcements in the near future. The goal, he said, is to “provide somewhat of a MySpace in a box” for customers. Chan said he took note of Andreessen’s comment about Cisco, but declined to respond.