sendmail.net: O’Reilly on Cygnus

“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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