Linksys Taps In To Home Networking Trend Company Mulling IPO.(A)

Byline: MIKE ANGELL

In 1994, Xircom Inc. led in making an emerging device for linking computers.

At first it sold these credit card-sized circuit boards, which plugged into PCs, to businesses. But no one had tackled the retail market for this new networking standard.

So privately held Linksys Group Inc. picked up the ball. It got some Taiwanese companies to make the cards. Then it got that product on U.S. retail shelves before Xircom, since bought by Intel Corp., or anyone else.

Years later, that strategy of working with Asian manufacturers and U.S. retailers is still working for Linksys in another emerging technology. It's an acknowledged leader of various home networking products. It's mulling the idea of going public when the stock market turns. It says its 2002 sales rose 27% from 2001 to $440 million. And it pegs its 2002 gross profit at $123 million.

Linksys targets the do-it-yourselfer who wants to share home or small-office/home-office broadband Internet connections. This area is one of the few growth stories in the battered networking gear market. (See related story on this page on the Playa Vista project.)

The 375-employee company is owned almost entirely by Victor Tsao and Janie Tsao. The married couple started the company in 1988, acting as a middleman between U.S. tech companies looking to get some of their products manufactured by overseas companies.