Jive Shares Spike on Partnership With Cisco Systems

Shares of Jive, the company that makes social and collaboration software aimed at the enterprise, rose by more than 10 percent after the company announced that its products will be sold and packaged with the collaboration software offerings of networking giant Cisco Systems.

Jive shares closed at $8.25 a share, up 77 cents. Cisco shares fell 10 cents to $23.01.

It’s good news for Jive on several fronts. First, a competing Cisco product is going away, but mainly it means that Cisco will be selling Jive as a key piece of its collaboration platform. Collaboration at Cisco is a big business, amounting to nearly $4 billion worth of revenue in its most recent fiscal year, or more than 10 percent of sales. The business includes its video conference and Internet phone business, but also its WebEx service for holding meetings online and its Jabber messaging platform.

That should amount to a healthy shot in the arm for Jive’s sales. “We’ve led this market for a long time, but WebEx is everywhere and Jabber is everywhere. Now Jive will be tightly integrated with both of them,” said CEO Tony Zingale. “Bringing them together makes a combination that is not being sold anywhere else today.”

An interesting development not covered in the press release, but which emerged in my conversation with Zingale and Cisco’s Peder Ulander, VP for marketing in its collaboration unit, is that Cisco will be shutting down its WebEx Social product and favoring Jive instead. “As part of our decision to move forward with Jive as a partner, we will announce the end of sale of WebEx Social,” Ulander said.

While Cisco is primarily known for its networking equipment, it has in recent years extended into more traditional enterprise IT products such as servers and storage, but also office tools and services like WebEx, which it acquired in 2007. CEO John Chambers frequently likes to say he wants Cisco to grow into the world’s top IT company.

Jive could use the good news. Since the company went public in late 2011, Jive shares have declined by more than 45 percent. When it reported quarterly results in February, it issued guidance saying its sales would be below what analysts had expected, prompting a 19 percent share price decline the next day.

In March Re/code reported that Jive had explored the possibility of selling itself and had approached several companies, including Oracle, SAP and Workday, as potential buyers. It’s worth noting that Cisco would have likely been on that list, too.

Jive is one of several enterprise collaboration companies that takes its cues from consumer social networks like Facebook and Twitter. Its biggest rival was Yammer, which Microsoft acquired in 2012 for $1.2 billion. Other companies in the space include Socialcast, which VMware acquired in 2011, and Salesforce.com, which launched Chatter, its own social collaboration service, in 2010.

This article originally appeared on Recode.net.