2/26/2007 -- Cisco Systems Inc. hasn't ever been afraid to spend money to make money.

The networking giant was one of the busiest acquirers in the acquisition-crazy 1990s and, in the present decade, Cisco has pulled the trigger on several dozen acquisitions -- including its $6.9 billion purchase of the former Scientific Atlanta. Last week, Cisco went acquiring once again, this time snapping up privately held Reactivity Inc., a provider of XML gateway technology.

Cisco officials tie the acquisition to the increasing ascendance of Web 2.0 technologies, which -- they argue -- are helping transform the Web from a comparatively static to an interactive and services-rich computing experience.

In this respect, Cisco officials say, XML- and Simple Object Access Protocol (SOAP)-based Web services have become the de facto standards for Web 2.0 information exchange. Enter Reactivity, whose XML gateways help customers deploy, secure and accelerate XML and Web services.

On a strategy level, Cisco positions the Reactivity acquisition as a boon to its aspirations in the Application Networking Services (ANS) Advanced technology segment -- and, additionally, as a feather in the cap of its Cisco Service-Oriented Network Architecture (SONA) vision. Cisco says ANS is designed to provide customers with shared application-aware services to improve application availability, performance and security. "Customers continue to validate our ongoing strategy of building more application services on the network platform," said Jayshree Ullal, senior vice president of Cisco's Datacenter Switching and Security Technology Group (DSSTG). "Reactivity together with our Application Control Engine (ACE) provides a highly capable solution for customers' application delivery needs in the data center."

Cisco has pledged to pay approximately $135 million in cash and options for Reactivity. When the acquisition closes, Cisco officials say, the Reactivity team and its products will be integrated into the DSSTG that reports to Ullal. --Stephen Swoyer