Cisco makes first acquisition of 2001

Router giant splashes out $150m on network chip firm...

Cisco Systems has paid $150m in stock for AuroraNetics, a San Jose-based company that designs chips used in fibre-optic networks. Having acquired 23 companies last year this is Cisco's first acquisition this year and the industry giant believes AuroraNetics will address the growth of data traffic in the metropolitan network environment. In a statement, Cisco said it expects this area to be the next "tornado market". Market research company Pioneer Research estimates the US metro market is currently worth $7.1bn and predicts it will grow by 26 per cent to $8.9bn next year. When the markets closed yesterday evening, Cisco shares were up over three per cent to $16.70 - still drastically short of the $80 figure in March 2000.