AOL Looking Into Linux

Hoping to bolster its competitive position against archrival Microsoft, AOL Time Warner is in talks to acquire Red Hat, the leading distributor of Linux, according to a published report in the Washington Post over the weekend.

AOL reportedly is looking to match its software, used by over 33 million subscribers, with an adapted version of Red Hat's Linux that would work exclusively with its Web browser and its proprietary content, according to the report.

While Linux has managed to gain miniscule market share against Windows on the desktop, the open-source operating system has made significant inroads against Microsoft on low to mid-range servers in both small and large companies.

Red Hat and other Linux distributors have also had success establishing the operating system as an embedded product in a number of handheld and other mobile devices

The company has scored major wins with accounts such as Amazon.com and signed bundling deals with IBM and other top tier manufacturers of server-level products.

Ongoing Competition

This is not the first time AOL has tried to compete against Microsoft. The company tried re-launching a reworked version of its Netscape Web browser intended to compete directly against Microsoft's Internet Explorer. That product has done little to stem the momentum of that Microsoft product the last year or more.

Officials from Red Hat, which is based in Durham, North Carolina, said it is their policy not to comment on such reports. Officials from AOL could not be reached for comment.

A competitor of Red Hat in the marketing of Linux, Germany's SuSE Linux, said Monday that large corporations have been increasingly open to the alternative operating system.

"In the last half year we've seen a marked growth in interest from large companies, but only from the user side--that they want to use Linux in their own systems," said spokesperson Christian Egle. "From the financial side, we had an investment recently from the fund iMillennium [Capital Management], which includes big companies--SAP, Deutsche Bank, Accenture, and La Caixa, a big Spanish bank. So there's already an interest from key market players."