SAN FRANCISCO: Cisco Systems acquired Subrah Iyar?s WebEx Communications Inc. for $3.2 billion in cash, expanding its line of products that allow businesses to host teleconferences over the Internet. Cisco said the transaction values WebEx at $57 a share, a 23 percent premium over the stock's Monday closing price of $46.20. WebEx shares (WEBX) The world's No. 1 seller of Internet equipment, Cisco expects the transaction to close in its fiscal fourth quarter ending in July and said the deal will have no effect on its earnings for its 2008 fiscal year. WebEx, which has 2200 employees and reported sales of $380 million in 2006, sells Web-based conferencing systems used mostly by small and mid-sized businesses. Cisco said it plans to integrate WebEx's technology with its line of expensive Internet gear that lets big corporations and government agencies conduct teleconferences using high-quality images. The combined companies "will deliver compelling solutions" to customers, Cisco chief development officer Charles Giancarlo said on a conference call to discuss the acquisition. Founded in 1996, WebEx has grown into the worldwide leader in online meeting applications, with 64% market share. More than 3.5 million people use WebEx every month to communicate and collaborate online. After the WebEx acquisition is complete, the company will be incorporated into Cisco's development organization, and Subrah Iyar, WebEx's chief executive, will report to Cisco's chief development officer, Charles Giancarlo.