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sendmail.net: O'Reilly on Cygnus

Nov 17, 1999, 06:55 (3 Talkback[s])

"Red Hat's acquisition of Cygnus Solutions has given investors another reason to believe while provoking concern in the open-source community. The company's consolidation strategy has prompted fears that Red Hat is setting itself up as the de facto arbiter of Linux development - though cooler heads note that the Linux community remains a powerful counterweight to any imperial ambitions Red Hat might have."

"Tim O'Reilly's first reaction to the deal had more to do with the numbers. "I was surprised at the price, which seemed too low. I felt Cygnus sold out cheap. I mean, Red Hat has this colossal market cap. If the gamble is between going public in this open source frenzy or selling out to someone who already has, the sale is a sure thing, but I would have thought the price would be comparable to what they'd get from an IPO. I would have expected between one and two billion, in Red Hat dollars." O'Reilly laughed. "In terms of what you might expect in the real world, it's a pretty darn good price. Of course, if Red Hat dollars devalue anytime in the not-too-distant future, you could have a very different opinion of this deal...."

"DiBona also downplays worries that Red Hat's market position will allow it to fork the distribution and take the market with it. "I don't think that's very likely, because if there was too much forking, there would be no Linux market. And there are too many players in it for that to happen. If Red Hat were to fork the kernel, the bad press and bad feeling they'd get from the people they rely on would be astounding."

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