Was Flip Video Really A Flop? (CSCO)

Earlier this week, Cisco CSCO announced that it would close the division that makes Flip Video camcorders. This news was quite surprising considering the initial success of the Flip Video. The handheld device proved to be a formidable foe in the camcorder industry, garnering 13% of the market in its first year of release. But as Cisco began to lose the focus of its core businesses, as the company's CEO, John Chambers, admitted to losing accountability, and as Jim Cramer called for Chambers' dismissal, it seemed as if change was inevitable. But did it really have to come at the expense of a camcorder? Chris Dixon, an investor and co-founder of Hunch.com, debated the issue with Erick Schonfeld, co-editor of TechCrunch. On TechCrunch TV, Dixon said that he thought it was sad that they didn't sell off the brand or at least hold onto the very best people. “It sounds like a lot of great people lost their jobs,” he said. “If this company had been independent, would they have had a better chance to have adapted in an iPhone world?” Dixon questions. Dixon uses Netflix NFLX as an example, a company that was once thought to be endangered by the Internet. “But they have a brilliant founder, a brilliant team,” he said. “They've managed to adapt. Had they been acquired by Blockbuster (BLOAQ) (BLOBQ), I doubt that would have happened.” Dixon has a point. But while Cisco has not released specific sales numbers for the Flip Video, many analysts believe the company made the right decision. A Cisco spokeswoman told Benzinga that this is the first of several steps the company is taking to refocus its business on five key areas, which Chambers recently outlined as being, “leadership in core routing, switching and services; collaboration; data center virtualization and cloud; architectures; and video.”