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UPDATED: MandrakeSoft Tells Its Side

May 22, 2001, 21:56 (52 Talkback[s])

[ Thanks to j_clark and Xunil00 for the tip ]

MandrakeSoft has issued a statement explaining the release of CEO Henri Poole and denying that the company has any plans to release any members of its development team.

According to the company, Poole was released as a result of "a divergence of views" over MandrakeSoft's overall direction, claiming that Poole sought to lessen the emphasis on Linux. The statement doesn't address the reported release of CTO Jean-Loup Gailly or rumors that other employees have taken voluntary paycuts to keep their jobs.

Gael Duval of Mandrake answered an e-mail inquiring about that pair of unanswered questions, namely: was Jean-Loup Gailly released from the company:

"Jean-Loup himself decided to leave two months ago because of a disagreement with the past management team (who left one month ago). It was before the change in the senior management."

and whether there's any truth to reports that others have taken paycuts or been laid off as well:

"The past situation was that it was easy to raise funding and raise money with a long term target in term of profitability. It is not anymore the case. So we are reducing a lot the expenses and are refocusing the company by switching to the mode "go fast to break even and profitability". To help this achievement, a part of the employees agreed to lower their salary, on a voluntary basis and with attractive compensations. It's only on a temporary basis (6 months period) and this will help to go faster to the break even point.

The truth is that Mandrake-Linux sells are going extremely well (according to PC Data, we are #1 retail seller in the USA for Q1 2001), that growth perspectives in Europe are huge, that according to Netcraft survey Apache-Advanced ExtranetServer (the version of Apache provided with Mandrake-Linux) is #15 most used web server on the Net, that we have many deals in the pipe and that we're planning an IPO process.

We are not an Internet company, we are not running out of cash, and we do have revenues."

Press Release--In order to quell further rumours regarding MandrakeSoft's alleged pressing needs for financial liquidity, recent layoffs of part of its senior management team and planned layoffs in its Development team, MandrakeSoft Co-Founder, Chairman and CEO Jacques Le Marois explains that "former CEO Henri Poole and himself mutually agreed on the management change over a month ago as a result of a divergence of views regarding the Company's strategic outlook: Henri's vision was to establish MandrakeSoft as a leader in the e-learning and e-support arenas without a specific focus on Linux, whereas my view is that the source of our success and very essence of our Company is the Linux-Mandrake operating system, and that all of our online services such as MandrakeExpert and MandrakeCampus should be geared to support it and bring value to our user community (...) Furthermore, there is absolutely no foundation in the rumour that we are planning to layoff our Development team, who represent a crucial asset for MandrakeSoft, especially in light of our refocusing on our core Linux values."

Le Marois further points out that "MandrakeSoft's prospects have never looked so good: In 2000, Linux-Mandrake took #1 slot in US Linux retail sales (Source: PC Data). The recent management changes and refocusing of our strategy on our core distribution and related online and offline services have allowed us to make major savings and we are on course to break even within a few months. The announcement of the latest release of the Linux-Mandrake operating system - version 8.0 - has met with unprecendeted success, both in terms of user adoption, which is made obvious by the hundreds of thousands of versions downloaded from our Web site since the announcement, and in terms of positive media coverage and pre-sales to our business partners throughout the world. The imminent launch of MandrakeStore, our online store, will create a solid new revenue stream: we've already pre-sold thousands of PowerPack Editions online. In addition, there are already more than 35,000 registered users on MandrakeExpert and MandrakeCampus, which represents massive revenue potential for us going forward: we will shortly be introducing an online 'tipping' system, allowing users to reward those Experts who provide them with useful responses to their Linux-Mandrake related questions, and MandrakeSoft will take a commission on each transaction. Besides, a paying user registration system to MandrakeExpert will also shortly be introduced, which represents yet another source of revenue for the Company". Le Marois concludes that "all these positive elements, together with the fact that we have build a very large individual and professional user community at very little expense, and have an experienced and highly committed management team to execute our strategy, are playing in our favour for our plans to IPO in the coming months, so watch this space!"

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