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Cisco Sniffs Out NetSift

It's not a spin-in!

NetSift, the startup acquired by Cisco Systems Inc. (Nasdaq: CSCO) for $30 million in cash and stock, is an honest-to-goodness startup. But you wouldn't think that, given the year-old company with undisclosed technology managed to catch Cisco's eye while being nearly invisible to the telecom market as a whole (see Cisco Nets NetSift for $30M).

But that's how startup life can be when Cisco is on the prowl. And recent weeks have seen a cluster of these smaller acquisitions, with chip firm Vihana getting bought for $30 million last month and the enigmatic M.I. Secure going for $13 million just recently (see Cisco Acquires Vihana and Cisco Buys Startup for $1.2M per Employee).

NetSift's situation -- a small, young, unknown company getting bought for an eyebrow-raising sum -- smacks of a startup bred and incubated by Cisco. After all, Cisco has used the "spin-in" technique before, investing in startups such as Andiamo Systems with the intention of acquiring them later (see Cisco Goes Spin-Crazy and Cisco Buys Andiamo). The signs were even more sandbag-to-the-cranium obvious with M.I. Secure, whose home address happened to be inside a Cisco building.

But NetSift, unlike M.I. Secure, appears to have grown up independently of Cisco.
The company was founded a year ago by researchers at the University of California, San Diego: professor George Varghese and Ph.D. student Sumeet Singh. Both took time off from academic pursuits to run NetSift, which was developing technology stemming from their UCSD research.

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