The University of Waterloo, which has one of the world's leading computer science schools, received a huge boost today when David Cheriton donated $25-million. The money will be allocated to research chairs, faculty fellowships and graduate scholarships. Cheriton, who received his masters in math and PhD in computer science from UofW, is probably best-known for advising two young entrepreneurs - Larry Page and Sergey Brin - and then making a seed investment in their start-up, Google Inc. Cheriton invested $200,000 in Google, and I've seen the value of his stake worth $58 million to $260 million. When Cheriton was asked why a new building was being constructed - a common practice when large donations are received by universities - he dryly replied that "I often think rich people are like dogs and fire hydrants, and want to leave their mark on things. But people are the ones who have the real impact." Cheriton, by the way, was wealthy long before his seed investment in turned into a pot of gold. In 1996, Cisco spent $220-million to buy Granite Systems, which Cheriton co-founded with Andy Bechtolsheim (Sun Microsystem's co-founder), who also was an early seed investor in Google.
For more about Cheriton, click here for the story I wrote in Saturday's Financial Post.

So whatever happened to Cisco's traditional M&A strategy of buying technology as opposed to big companies where resolving cultural differences can make acquisitions difficult? It seems like this approach has been thrown out the door as Cisco is buying Scientific-Atlanta for $6.9 billion (it's really $5.3 billion given SA has $1.6 billion of cash). Whether or not this move is seen as unorthodox, it's brilliant because Cisco now has a major and leading presence in the digital household, which is poised to take off as high-speed Internet networks make it easy for carriers and cablecos deliver all kinds of new services. Let's be clear here, Linksys was a nice business but selling routers in a competitive market is far from earth-shattering. On the other hand, SA is poised to become the gateway to the digital home. The "big pipe" that comes into the home will, in many cases, be connected to SA's set-top box, which means Cisco will play a key role in how new services are delivered. In particular, SA will give Cisco a crucial role in the video business, which is booming as cablecos upgrade their networks to implement VOD and PVRs while telcos scramble to launch IP-TV.