Video conference use soars as airlines squirm

By Helen Chernikoff - Analysis

NEW YORK (Reuters) - Airlines' pain is video conferencing's gain.

As companies slash travel budgets in the face of higher travel costs and a softer economy, they're increasingly adopting technology that enables employees to collaborate face-to-face without boarding a plane.

The businesses that make such technology, such as Polycom Inc (PLCM.O: Quote, Profile, Research, Stock Buzz), Cisco Systems Inc (CSCO.O: Quote, Profile, Research, Stock Buzz) and Hewlett-Packard Co (HPQ.N: Quote, Profile, Research, Stock Buzz), are seeing profits from video conferencing soar alongside the price of jet fuel and gasoline.

With oil prices hitting an all-time high of $135.09 per barrel in May, Cisco has been hearing customers talk more in recent weeks about using video conferencing to avoid travel, said Erica Schroeder, who heads marketing for Cisco's advanced video conference product, TelePresence.

"Travel is the topic of conversation from customers to us," said Polycom Chief Financial Officer Michael Kourey. "We're not having to pitch this."

As part of an effort to cut travel costs by 10 percent, staffing services company Manpower Inc (MAN.N: Quote, Profile, Research, Stock Buzz) has ramped up use of its video conference equipment in the last couple of months, said Allan McKisson, a vice president of human resources at Manpower.

"It used to be, when you can video conference, do it. Now it's do video conference first, or maybe don't have the meeting," said McKisson, who must approve his direct reports' travel requests.

In companywide e-mails, office furniture maker Herman Miller Inc (MLHR.O: Quote, Profile, Research, Stock Buzz) has encouraged employees to use video conferencing in addition to conference calls and car-pooling to cut operating costs, spokeswoman Susan Koole said.