Polycom acquires HP's Halo video conferencing for $89M

Polycom Inc. (PLCM) announced it will acquire Hewlett Packard Co.’s (HPQ) Halo video conferencing company for $89 million in cash.
The deal includes HP’s products, contracts and employees, but leaves speculation on what will happen to HP’s team that developed the Halo technology in Corvallis, Ore. HP is based in Palo Alto, Calif. and Polycom is headquartered in Pleasanton, Calif.
Both HP and Polycom have yet to comment on the employees in Corvallis with Polycom releasing a statement saying, “The details are not flushed out at this point.”
HP launched the video conferencing product and service six years ago, when such video conferencing services were just taking off. The model of Halo was to create identical-looking rooms for users in multiple locations around the world, linking subscribers with HD video and superior audio. The idea was to create the presence of a conference table and make it appear as if users were all sitting at the same table.
However, the Halo systems cost approximately $550,000 per room plus $18,000 per month in service fees. The systems were also restricted to only communicate with other rooms also containing Halo products and services.
Cisco Systems (CSCO) competes with similar high-end video conference offerings along with lower-quality but much more affordable alternatives in video chat such as Apple Inc. (AAPL) or Microsoft Inc.’s (MSFT) recent acquisition of Skype.
Polycom plans to incorporate its technologies into HP’s WebOS system, which was acquired by HP when it took ownership of Palm last year. HP also agreed to resell Polycom’s conferencing equipment.
Both Polycom and HP have offices in Austin. Polycom announced in April that it was relocating its Austin office to double its current size and accommodate the hiring of 60 new employees.
HP operates a data center in Austin and has a contract with the City of Austin which started Jan. 1, 2006, to invest a total of $300 million and hire a total 140 workers by the end of 2011.
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