Original URL: http://www.theregister.co.uk/2000/02/03/va_linux_buys_slashdot_org/

VA Linux buys Slashdot.org

Along with the rest of Andover.net

By Drew Cullen

Posted in Business, 3rd February 2000 17:57 GMT

VA Linux Systems is to buy Andover.net, owner of Slashdot, Freshmeat.net and a clutch of disparate Linux Web sites, for $1 billion in shares and some cash. Speaking at LinuxWorld Expo, Larry Augustin, VA's CEO, said the company would pull the Andover sites into a "great developer community and resource online to drive open source". Well, it's certainly a way of building bulk rapidly -- so far as Linux-friendly eyeballs are concerned. The combined sites will account for "two thirds of the total traffic of major open source sites, putting the combined network in the top 100 Web destinations world-wide". Andover.net brings 50 million page impressions per month to the party. In terms of the acquisition price, the deal's a more questionable proposition. Andover is a titchy company, turning over $2.1 million and losing $15.7 million (IPO costs account for most of the red ink) in Q3. Mind you, VA Linux ain't much bigger -- turning over $17.7 million (losses: $14.5 million) in 1999. And its market cap is $5 billion. Commercial success for the deal will depend on how well VA stitches Andover's Web properties into its own collection, including Sourcforge, Linux.com and Themes.org. The enlarged company will also "increase the opportunity for sponsorships and business partnership revenues" across the network. The open source movement is throwing up a clutch of hybrid software developer-cum-media empires, lately. In November, Red Hat launched Wide Open News (of whom The Register is a partner), and a damn fine news and comment site it is too. Andover.net is a hybrid publisher/software services site, as is VA Linux through Linux.com. Right now there could more money flogging ads and sponsorship to a tightly targeted Linux demographic, than there is distributing the software. And why should ZD, CNET, IDG,et al grab all the dough? We trust VA Linux and Red Hat will maintain their hands-off/open source kind of a relationship with their editorial titles. This may not be easy. Most publishers start out with good intentions, but they all turn into megalomaniacs. Can the Linux distros avoid this temptation? ®