[Am-info] AOL in Negotiations to Buy Red Hat

[Paul Rickard]

========== On 2002.01.20 05:53 PM, Mitch Stone typed: ============

>Another possible (and more encouraging) speculative scenario: AOL pumps 
>money into Red Hat, helps them develop a strong "brand" and uses that to 
>leverage the big box makers into selling retail Linux boxes. Far-fetched, 
>perhaps, but something to consider. All this assumes Steve Case really 
>wants to go mano-a-mano with Bill Gates.

     The RedHat buyout wuould be with stock; paper money that has a small 
impact on the bottom line of the company that gives it out. Spending REAL 
money on RedHat would get quite expensive, and it's no secret that AOLTW 
is cutting its budgets all around, from marketing to film production. 
They're so cheap they put all their DVDs in a sorry cardboard case 
instead of something solid like all the other companies do. And even if 
it did buy RedHat and spend ungodly amounts of money on it, AOL has 
nothing to offer the box assemblers for incentive except money, and the 
way budgets have been tightened there probably isn't enough of that 
around to convince any of them to risk the wrath of Microsoft. Microsoft 
can allow or disallow the sale of Windows, that means more than just a 
cash bonus, it means the survival of companies. Microsoft has every 
mainstream OEM by the throat, and it has for a better than 15 years. AOL 
cannot change that with or without RedHat.
     Case doesn't have the testicles to go face to face with Microsoft 
anyway, at least not the way his now-underlings at Netscape once did. The 
way Novell did before it had its tail clipped. The way Borland used to, 
before Microsoft beat it lifeless. Digital Research. IBM, for crap sake. 
And they had a lot better stuff than AOL does, even including WinAmp, 
Netscape, all the online properties, and the AOL service itself. AOL 
doesn't have a compelling enough product (RedHat irregardless) to win in 
a straight war with Microsoft, they just have enough customers to do OK 
while skirting around the edges of Ms' product lineup. Online services, 
Web sites, and instant messengers are one thing, operating systems are 
another enirely. So far, Microsoft has been fairly tolerant of AOL and 
treated it like little more than an annoyance. A love-hate relationship, 
the appearance of civility. Occasional attacks, but nothing with the full 
force of MICROSOFT (all-caps now) behind it. If AOL had an advancing OS 
on the market, Gates, Ballmer, Allchin, and Belluzzo wouldn't rest until 
there was nothing left of AOLTimeWarner except a smoking hole in the 
earth. You know what Ms was capable of in the past, and the company has a 
better position now than it has at any previous time in history.
     Bottom line: if AOL buys RedHat, they won't spend any money to 
develop it. If they by some chance do spend money on it, the amount will 
have to be massive and still likely futile. And if they somehow do all 
that and make any progress on Microsoft with RedHat, Microsoft will 
flatten the entire corporation and all its subsidiaries like a 
steamroller over a jelly donut. It still MAKES NO SENSE unless AOL does 
this to HELP Microsoft instead of hurt it. _NO SENSE WHATSOEVER._



======== Paul Rickard, Editor of The Microsoft Boycott Campaign =======
--------------------------------[ Http://www.msboycott.com ]-----------

  "But for Microsoft's interference, the market would be much more
   dynamic as new technologies and fresh innovations challenged the 
   company's present dominance."
       -Judge Robert Bork, former US Supreme Court nominee