AOL not in talks with Red Hat

AOL Time Warner said it was not in talks to buy with Linux distributor Red Hat, quashing a published report, but analysts said a future partnership between the companies would make sense. A Washington Post article over the weekend reported that AOL Time Warner was in ‘fluid’ talks to buy Red Hat, citing sources familiar with the matter.

“The Washington Post story is incorrect,” spokesman Andrew Weinstein told Reuters. “AOL is not in negotiations with Red Hat.” Several analysts said that while a merger did not make much sense, there were several opportunities for partnerships between AOL and Red Hat, a major distributor of alternative operating system Linux whose underlying code is freely available, unlike the closely guarded proprietary code of companies like Microsoft. A partnership with Red Hat could help AOL boost subscriptions to its online service, while avoiding the dominance of Microsoft’s Windows on the desktop.

“People primarily access AOL on computers that run on Windows,” said IDC analyst Dan Kusnetzky. “Linux could be a way for AOL to get access to software that would drive a consumer-focused network computer, which wouldn’t run on Windows.”

Merrill Lynch analyst Peter von Schilling said in a research note that the two companies could work together on several potential deals. One such pact could make AOL a Red Hat enterprise Linux customer. Another could see AOL transfer or outsource its Netscape browser to Red Hat to support and bolster its existing Mozilla open source project, which developed Netscape’s code. “AOL has an incentive to see the standards-based, independent Netscape browser be successful so that consumer websites don’t become dominated by Microsoft optimised ‘standards’ such as ‘.NET,” said Schilling.

The Internet and media giant could also partner with Red Hat to create a design road map for software to be built in to electronic devices based on Linux/Open Source software.

A Red Hat spokeswoman declined to comment, but said the company would be making announcements at Linux World a conference where companies often announce new product launches and deals. She declined to comment further on the nature of the announcements.

Reuters