Networking giant Cisco on Monday said it will chase investment opportunities in Central and Eastern Europe as part of its overall strategy to create stronger market beachheads in the emerging world.

The San Jose, California-based company, which once invested almost exclusively in Silicon Valley tech firms or on-campus startups, generated only 9 percent of its 2006 revenue in emerging markets, but that is growing at a 35 percent annual rate.

And as the penetration of networking technology grows in the emerging markets of India, China, Russia, and Latin America, companies such as Cisco have raised their investment profiles in these areas.

Cisco will make both direct and indirect investments in tech startups in such as Bulgaria, Czech Republic, Croatia, Estonia, Hungary, Latvia, and Ukraine in collaboration with 3TS Partners, a private equity and VC firm based in Budapest.

In its foray into the global VC market Cisco has tended to fund either firms directly involved in telecommunications or firms that provide services or software that generate large amounts of Internet traffic.

Cisco's management has said on a number of occasions that the success of these startups feeds demand for the company's routers and other networking and telecommunications devices.

The investments also allow the networking giant to stay on top of what is happening in the countries in which it has established an investment presence, said Hilton Romanski, who heads Cisco's global investment initiative.

To date Cisco has invested more than $2 billion in startups around the world, including the United States, which absorbs by far the largest share of that total.

In December 2006, Cisco invested $50 million for a stake in China Communications Services, a telecom services firm, and earlier this year Cisco said it hired a full-time investment manager in Moscow to seek out investment opportunities in Russia.

Cisco's first investment was Ozon, a Russian e-commerce firm that offers retail services similar to Amazon. The $18 million funding was led by Index Ventures.

Countries in Central and Easter Europe are strong in a number of technologies including broadband, wireless, security, and VoIP, according to Kaan Terzioglu, Cisco's vice president for Central and Eastern Europe.