WebEx Communications (A): Navigating Through A Turbulent Market

By George Foster, Erin Yurday
2003 | Case No. SM121A
WebEx Communications, founded in 1996 by Min Zhu and Subrah Iyar, was an Internet-based carrier-class communications services provider of web conferences and meetings. WebEx’s online, real-time, interactive, multimedia communications services allowed its customers to communicate via voice conferencing, video conferencing, and data communication. With data communication, using just a standard web browser, multiple users could share and remotely control software applications and desktops; share and edit documents and presentations; remotely browse the web together; chat live; write on whiteboards; record and playback sessions; transfer files; etc. WebEx’s services improved the efficiency of many activities: meetings, sales, marketing, training, customer support, etc. WebEx’s early performance was impressive, but analysts had recently pointed out that the revenue growth rate was slowing. WebEx was considering a number of strategies to boost sales: expand the product line vertically to target specific end-user groups like healthcare or finance; increase partnering agreements with resellers; focus more on enterprise customers, which had potential for hub-and-spoke acquisition of additional customers; or expand internationally (international sales accounted for about 4 percent of revenues in 2002). Also, Min and Subrah had to consider the repercussions of some recent news. On January 21, 2003, Microsoft announced it was acquiring PlaceWare, WebEx’s most significant competitor.
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