[Geeks] AOL in Negotiations to Acquire Red Hat

Nick Seidenman nicks@argate.net
Sat, 19 Jan 2002 21:33:13 -0500 (EST)

On Sat, 19 Jan 2002, Stephen D. Williams wrote:

> http://www.washingtonpost.com/wp-dyn/articles/A5064-2002Jan18.html
> Now, this is interesting.

More like HORRIFYING!  Look at what they did to Netscape!

> sdw
> <http://a188.g.akamaitech.net/f/188/920/1d/www.washingtonpost.com/wp-srv/washtech/templateimages/washtech_e1.gif> 
> AOL in Negotiations to Acquire Red Hat
> Deal for Distributor of Linux Operating System Could Lead to a New 
> Challenge of Microsoft
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> &amp;lt;a&amp;gt;&amp;lt;img&amp;gt;&amp;lt;/a&amp;gt;
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> By Alec Klein
> Washington Post Staff Writer
> Saturday, January 19, 2002; Page E01
> AOL Time Warner Inc. is in talks to buy Red Hat Inc., a prominent 
> distributor of a computer operating system, an acquisition that would 
> position the media giant to challenge archrival Microsoft Corp., 
> according to sources familiar with the matter.
> Red Hat, a publicly traded firm based in Durham, N.C.,sells products and 
> services based on the Linux operating system, the freely available 
> software developed collaboratively by volunteers. Linux is designed for 
> a wide variety of gear, running corporate computer servers and consumer 
> devices such as personal computers, cell phones and video games.
> The Red Hat negotiations -- which are still fluid -- are the latest 
> indication that AOL Time Warner, the world's largest media company, is 
> looking for alternatives to software made by Microsoft, whose Windows 
> operating system runs 90 percent of the world's PCs. The longtime 
> competitors have fought over an array of rival consumer technologies 
> lately, including online subscription services, instant-messaging 
> systems and Web-based video and audio players.
> Officials of AOL, Red Hat and Microsoft declined to comment.
> To counter Microsoft's desktop hegemony, New York-based AOL Time Warner 
> could use the deal to couple its America Online software, the market 
> leader with more than 33 million Internet subscribers, with Red Hat's 
> operating-system technology, sources said.
> The AOL online software, which consumers can install free from the Web 
> or a compact disk, is now designed to run on Microsoft's Windows 
> operating system. But the AOL software could be configured to override 
> Windows and launch a version of Red Hat's Linux operating system, 
> sources said.
> With such a move, AOL Time Warner could potentially make significant 
> inroads into Microsoft's bread-and-butter business. An even greater 
> challenge to Microsoft would be for AOL Time Warner to develop a rival 
> operating system that works exclusively with the media giant's own 
> Internet service provider, its Web browser or proprietary content.
> This is not the first time AOL Time Warner has explored alternatives to 
> Windows. There were rumblings last year, during a flash point in the 
> rivalry between the two tech titans, when AOL Time Warner was scouting 
> for an acquisition or partnership with a firm that could provide a 
> competing operating system.
> AOL Time Warner has already tried to counteract Microsoft on other 
> fronts, including rebuilding its Netscape Web browser business to better 
> compete against Microsoft's dominant Internet Explorer. Netscape 
> technology has been incorporated into a Gateway Inc. tabletop Internet 
> terminal and Sony Corp.'s PlayStation 2 video-game console. Linux also 
> runs the Sony product.
> It was unclear yesterday how much money Red Hat could fetch. With a 
> market capitalization of about $1.45 billion and about 600 employees 
> worldwide, Red Hat reported $68.2 million in revenue in the nine months 
> ended Nov. 30, down 10 percent over the same period a year earlier.
> The software company reported a profit of $1.8 million, or a penny per 
> share, in the nine months, compared with a loss of $10 million, or six 
> cents a share, in the year-ago period.
> Red Hat makes its money by packaging Linux for commercial and consumer 
> use and by providing services and support to customers who use it. The 
> operating system itself is freely available on the Internet -- thanks to 
> an initiative by a programmer named Linus Torvalds who organized 
> volunteers to write the original source code. Unlike Microsoft, which 
> does not fully divulge its code, the Linux code is available to anyone 
> who agrees to make modifications publicly available.
> Linux has yet to be adopted widely by consumers, largely because it 
> requires some technical proficiency to install. But it is popular with 
> the tech crowd and, according to industry estimates, runs about 30 
> percent of all computers servers -- the powerful computers that function 
> as hubs on a network.
> Red Hat has claimed such big clients as Amazon.com Inc. and 
> International Business Machines Corp., providing software and support 
> for IBM servers that use the Linux operating system.

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