SAN JOSE, Calif. – Cisco Systems is acquiring Reactivity, a California-based software firm focused on eXtensible markup language (XML).

Cisco will pay $135 million in cash and assumed options for Reactivity, which is privately held.

Reactivity has 58 employees. It is based in Redwood City, Calif.

The move helps Cisco gain expertise and market share in the XML space, which is essential for development of so-called Web 2.0, or more personally interactive, Web applications.

Cisco is continuing to expand its presence in application networking services through which it provides customers with shared application services over a network platform.