Cisco's Entry In Social Networking World: Adding Value To "The Network"

Cisco’s (NSDQ: CSCO) entry into the social media and networking space has been a surprise to many over the last year, as it made two small software acquisitions (Tribe and Five Across), and has been readying its new services since it appointed Dan Scheinman as the SVP and GM of its media solutions division in December last year. Today, the company finally has some details on its strategy, and I spoke to Scheinman earlier today on it. It is launching what it calls “EOS”, its “entertainment operating system”…in other words, a white label social networking service which ties in online and the digital home, and community.

So why did it enter this already crowded field, with companies like KickApps, Ning and tons of others? Well, it has some distinct pitches:
— They can bridge the digital home divide, and bring the content onto TV faster and better than anyone can. With acquisitions such as Scientific Atlanta, Kiss and Linksys, that seems plausible.
— Then Scheinman pointedly mentioned the division hasn’t raised $50 million each like others have and won’t go anywhere anytime soon…the stability pitch.
— The network, the kind Cisco traditionally operates in with its routers etc, is more than a fire-hose of content, and “can ultimately provide a Web 2.0esque entertainment experience by bridging the gap between consumers and content owners.”

And how does this all tie into Cisco’s main business? Some corporate-speak here, but gives a hint of the scope: “We consider entertainment and advertising as a $1.8 trillion market, and since it all flows over the network, if we make the network relevant, we can retain and add value to our core products. Also, we think there’s a lot of room for innovation in our core products. The cost of distributing content for a big media company is very high, and we think adding community all the way down to the routers will result in efficiencies in distribution costs.”

It has signed on NHL and Nascar as its early customers, and expects more details in the next few months, Scheinman said. For big content companies, it will be a plug and play system, but it won’t be a destination service a la Ning.

Will it work? Depends on whether the media companies buy into the rather complex philosophy. And of course, costs involved.