Flip owned 35% of the camcorder market, which it took over in just a few years. It was incredibly popular, and still is, selling heavily on Amazon. Then it was bought by Cisco, and now they’re taking the technology and shutting down the company, and in the process, killing off the next great Flip product, FlipLive.

Why? Because Flip’s new product was going to cost them a fortune.

The Flip is no film camera, but for its size and price, it takes a pretty good video. And it was about to get even better with the FlipLive, a camera that could instantly show video from any WiFi hotspot.

So why is Flip dead, and the FlipLive no more? Because Cisco makes a lot of money on expensive, elaborate video conferencing gear, and a company they owned was about to roll out a cheap solution that would have eradicated a good chunk of that market. After all, if you’ve got a little camera with WiFi and a secure way to share the info…why buy one of Cisco’s huge systems?

The problem was, no new product, no reason to have the company, so Cisco decided to axe the entire division, which they weren’t running well anyway, and eat $590 million instead of losing even more.

Our thoughts are with the terminated Flip employees, and we hope they start a new company just to show Cisco up. Cisco deserves it.