WebEx Sees Opportunity in Outsourcing

Seeing opportunity in the IT outsourcing trend, WebEx will buy Indian conferencing outfit CyberBazaar for $4 million in cash.

The San Jose, Calif., company will offer its online meeting, training and presentation services for call center and software development groups that need to communicate with home offices in the U.S. or Europe.

CyberBazaar’s customers include Indian technology giants Infosys and Wipro, as well as U.S. heavyweights Hewlett Packard, Merrill Lynch and GE. The Bangalore-based company, which owns a 90 percent market share in India, will maintain its offices, management team and 120 people employees. The deal is expected to close in the first quarter.

“WebEx has been doing business in India for about two years and have had a reseller agreement with CyberBazaar,” Colin Smith, a WebEx spokesman told internetnews.com. “Business is picking up in India.”

Smith declined comment on whether WebEx is scouting acquistions in other IT outsourcing hubs such as China and Russia. He noted that the company already has about 400 people in China.

WebEx’s acquisition comes as the online meeting market begins to hit its stride thanks to the growing popularity of broadband connections.

Cisco jumped in with the $80 million acquisition of Latitiude Communications in November. And last year, Microsoft made another run at the sector with its purchase of PlaceWare.

The Redmond, Wash., giant recently released a new version of its LiveMeeting offering with the Office 2003 package. The bundling of LiveMeeting with the popular desktop software could be an edge. WebEx, however, still controls about 65 percent of the Web conferencing market, according to SG Cowen analysts.

The move also comes as large U.S. firms are looking to create or shift thousands of jobs to India, China, Russia and other countries that have a high skill base but low costs. The most recent example is IBM , which is considering moving almost 5,000 programming jobs offshore.

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