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Fairfax IT: VA Linux revises overoptimistic revenues forecast

“Linux software and support company VA Linux Systems today more
than halved its expected revenues for its 2001 fiscal year, boding
of tough times ahead and showing how tough it is to make money off
open source software.”

“The company issued a statement today warning that signs of a
general economic slowdown in the United States has made the company
rethink its earlier estimate of a 125 per cent increase in revenues
for the financial year. It has now predicted revenues will only
grow by about 60 per cent.”

“Today’s announcement coincides with the revelation that VA
Linux expects revenue for the second fiscal quarter ending on
January 27, 2001, to be $43 million to $50 million, an increase of
115 per cent to 150 per cent compared to the second quarter of
fiscal 2000. … “Going forward in this economic environment,
we intend to focus on higher margin business and to manage expense
levels such that we can achieve profitability given our revised
revenue expectations.”


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