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Corel Turns a Profit

WordPerfect maker plans to focus on core products--and Linux.

By Tom Spring, PCWorld   

Corel CEO Michael Cowpland credited the return to profitability to cost-saving measures including divesting "noncore" technologies. Over the past year, Corel has closed its office in Utah, laid off 340 employees, and scaled back its product lines.

Fourth-quarter revenues rose 54 percent to $67.2 million. Income for the quarter was $6.8 million, compared to a net loss of $66.9 million for the same period last year.

Although Corel has not upgraded WordPerfect or CorelDraw in two years, the company says sales were steady and strong in 1998. Major upgrades of both products, Cowpland says, will boost Corel's profits even more in 1999. The company expects to ship new versions of its WordPerfect Office 2000 and CorelDraw in the second quarter. According to Corel, there are 50 million users of WordPerfect and CorelDraw.

"If there is any company that has got a shot at being number two in the office market, it's Corel," says Jeffrey Tarter, publisher of Softletter, a software industry newsletter.

Boosting its focus on software, Corel will sell its Corel Computer NetWinder division to Ottawa's Hardware Canada Computing in exchange for a 25 percent stake in the firm.

Looking to Linux

Cowpland says Corel will attempt to become a leader in developing software for the Linux operating system, which is slowly gaining market share.

A longtime supporter of Linux, an open-source-code operating system that enjoys a cultlike status among its followers, Corel says it will work to make Linux versions of its software and develop new ones. In November Corel invited Internet users to download a free Linux version of WordPerfect 8. Since then, according to Corel, 400,000 people have downloaded the program.