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Byte.com: A Wireless Neighborhood Freenet (and some commentary on failing Open Source companies)

Oct 01, 2001, 17:54 (16 Talkback[s])
(Other stories by Moshe Bar)
"This column is really about how some friends and I are turning left-over Linux boxes plus wireless LAN equipment into instant neighborhood "freenets." But first a few observations about the Open Source ecology in which - or from which - these things swim.

There is little doubt by now that the Open Source business model (and with it Linux in large part) is becoming a liability for many companies. Let's face it, with VA Linux going into proprietary technology, Great Bridge (a company built around the GNU Postgres database) going out of business, and SuSE needing an emergency capital infusion from IBM to survive, it has become clear that companies cannot make money (real money) from selling software that you can download for free from the Internet. Especially not in today's moribund high-tech market.

The stock market has come to the same conclusion and it is heavily discounting stocks of companies with a heavy Open Source presence, such as the aforementioned ones (although VA Linux is trying to exit Open Source in order to counter the investor's fears). If a company stock trades at below $1 for a some period it will be de-listed from the NASDAQ (market capitalization is another of a series of requirements). Companies such as VA Linux are fighting to stay listed. VA Linux's stock has been on a downward spiral for quite some time and is now at around $1 with a market cap of around $59 million. Red Hat is doing fine, they are still up around $3 with a market cap over $500 million. Caldera, on the other hand, is probably going to be delisted shortly. Caldera has been below $1 for almost two months now, currently at 39 cents with a market cap of just under $30 million."

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