Technology Beat

Red Hat and Fedora

The computer operating system Linux is now big business. Now there are two types of Linux users: those who pay for the software (and receive all the latest updates, as well as technical support), and those who don't.

Red Hat, the leading company selling the system bundled with tech support, stripped its name off the free version of the software-now known as Fedora-and got out of the business of trying to market the paid version to individual users. Instead, Red Hat will concentrate its efforts on selling its "enterprise" products to businesses, governments, and institutions.

Red Hat's decision exposes the hard truth about the Linux business: It sells well for hard-core server use but profits on the desktop are hard to find. Many Fedora users don't need the support or infrastructure services that are key to Red Hat's business model.

Red Hat "sponsors" Fedora and "retains editorial control," but does not "support" it, which means users must rely on their own ingenuity and help from other users. The Fedora project is win-win for Red Hat and its users. Anyone can download the operating system free-and the company gets willing volunteers to test its latest updates.

Getting hostile

Oracle's ongoing battle to buy rival PeopleSoft is a grand saga of Silicon Valley. Oracle, the second-largest software maker, shares one more thing in common with industry leader Microsoft: trouble from the federal government. The Justice Department seeks to scuttle Oracle's hostile $9.4 billion bid.

Prosecutors claim a merger will stifle the $20 billion market for business-applications software-even though both companies compete heavily with Microsoft and the German company SAP. PeopleSoft itself spent $1.8 billion last year to acquire competitor J.D. Edwards.

Oracle set a deadline of June 25 for its current offer, and a court may not rule on the government's case by then. Its asking price has jumped from $16 to $26 per share since the merger was proposed last June. A planned proxy fight to put loyalists of Oracle CEO Larry Ellison on PeopleSoft's board was called off because of the Justice Department's lawsuit. The DOJ suit could keep the merger fight going for months.

A Florida cyberporn marketer was sentenced to 2-1/2 years in prison for registering misleading internet addresses-using misspelled brand names like Disneyland, The Backstreet Boys, and others-that misdirected some unsuspecting users to smut sites. John Zuccarini pleaded guilty last December and admitted that he capitalized on youngsters' spelling errors to lure them to online ads, which included pitches for pornography. Prosecutors, who charged him under a provision of the new Amber Alert law, said the defendant made up to $1 million per year from the scheme.

The Johann Sebastian Bach Archive in Leipzig, Germany, plans to restore the composer's original scores and make them accessible online. This collection includes 44 original compositions and some rare books and manuscripts about his work. The curators received a $137,500 foundation grant for the project, which is intended to help musicians, students, and music devotees learn more about Bach's work.

AT&T executives predicted their company's consumer division, which includes long distance and internet access, will reverse its downward spiral in two years. One strategy involves offering more local service-over leased landlines or via internet connections. AT&T may also reenter the mobile-phone business once Cingular absorbs the spun-off company AT&T Wireless.

Microsoft's Bill Gates announced new security features intended to deter attackers who abuse bugs in operating systems. For example, a Windows XP update coming later this year will include a control panel that lets users check to see if a computer's security is working and up-to-date. Mr. Gates admitted that much more work lies ahead as computer criminals become more sophisticated.

Intel announced new cell-phone chips that reduce dropped calls, support high-speed data networks, and even allow videoconferencing. The processors, code named Hermon, can also support Wi-Fi and Bluetooth standards, which allow internet access and connectivity with a stand-alone computer. Intel hopes manufacturers will use its technology to design new phone models.