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Venturebeat.com wrote a good piece this morning summarizing Cisco Systems Inc.'s (NASDAQ: CSCO) activities in China. Cisco, which generates about $1 billion in free cash flow per month, is definitely not putting its balance sheet at risk while learning about this huge market.Venturebeat wrote that according to Cisco VP Ned Hooper, Cisco has already returned a profit on its first $400M batch of venture investments in China beginning in 2001. Now Cisco has started investing from a second batch of funds, although it's too early to tell how these investments are doing. In total, Cisco has invested over $700 million into almost 30 Chinese start-ups, including online gaming company Shanda (NASDAQ: SNDA).
Cisco's most recent investment is $50 million in China Communications Services, a new spin-off from China's state-run telecom. For Cisco, $50 million is purely putting a toe in the water before jumping in.
Expect Cisco to keep a low cost approach to this potentially huge market.
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