[Updated Jan. 22, 2002, 12:10pm PST] On Friday, January 18, Alec Klein of the Washington Post broke the news that AOL Time Warner might be in talks to buy Red Hat. Given that Red Hat is the leading (and most well known) Linux software vendor, such an occurrence would undoubtedly have a major impact on all aspects of the Linux market. But it also would have the potential to dramatically disrupt the status quo of the entire computer operating system market.

Latest update: — (Tues. Jan. 22) — Reshma Kapadia and Adam Pasick of Reuters news agency quote AOL spokesman Andrew Weinstein as saying today “The Washington Post story is incorrect. AOL is not in negotiations with Red Hat.” More below.

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• AOL in negotiations to buy Red Hat — Alec Klein of the Washington Post writes . . .

  “AOL Time Warner Inc. is in talks to buy Red Hat Inc., a prominent distributor of a computer operating system, an acquisition that would position the media giant to challenge arch rival Microsoft Corp., according to sources familiar with the matter . . .”

  “The Red Hat negotiations — which are still fluid — are the latest indication that AOL Time Warner, the world's largest media company, is looking for alternatives to software made by Microsoft, whose Windows operating system runs 90 percent of the world's PCs. The longtime competitors have fought over an array of rival consumer technologies lately, including online subscription services, instant-messaging systems and Web-based video and audio players.”

  “Officials of AOL, Red Hat, and Microsoft declined to comment . . .”

• Red Hat Reported in Acquisition Talks with AOL — Maureen O'Gara of LinuxGram writes . . .

  “A story has surfaced in the Washington Post of all places claiming that Red Hat, the most entrenched of the Linux commercializers, is in talks to be acquired by AOL Time Warner.”

  “The report seems credible since Red Hat is known to have been casting about for such an exit strategy for a long time and to have approached all the usual suspects such as vendors like Hewlett-Packard with acquisition feelers.”

  “The notion of a tie-up between Red Hat and AOL is, if nothing else, amusing to conjure with since it provokes visions of two more evenly matched giant mastiffs, AOL and Microsoft, vying over the same bone . . .”

• An AOL-owned Red Hat would be good for everyone — except Microsoft — Robin “Roblimo” Miller of NewsForge writes . . .

  “This editorial is purely speculative, based on an unconfirmed report in The Washington Post that says, “AOL Time Warner Inc. is in talks to buy Red Hat Inc.,” an idea I think would be wonderful for everyone who works with computers or the Internet — except Microsoft. For them, an AOL-owned Red Hat would be a disaster.”

  “The first and most obvious benefit of AOL getting involved with Linux would be an end to sites that require Microsoft Explorer or other Windows-specific software (like Windows Media Player) to access some or all of their content. All complaints about not being able to access secure bank or other financial transaction sites with Mozilla, Netscape 6.x or Linux would cease. Suddenly every company and organization in the world that decided to ignore browsers other than MSIE (and operating systems other than Windows and/or Mac) would be forced to remedy that mistake.”

  “I'd like that.”

• Think Twice, Red Hat — Andy Oram of O'Reilly writes . . .

  “The news reports today say that Red Hat may be bought by AOL Time Warner, just as several years ago AOL bought Netscape. The analogy I'm making between Red Hat and Netscape is not a casual one; the history of AOL acquisitions shows that the two sides should be exceeding cautious about this odd lash-up.”

  “About nine years ago, O'Reilly & Associates sold a service to AOL (before it caught the slightly bigger prize of Time Warner.) AOL management clearly impressed our negotiators as savvy go-getters; their success in recognizing the Internet's importance and leveraging the Internet to sell their own service was just one piece of evidence. Yet a year after we sold Global Network Navigator to them, it was dead.”

• Who wins if AOL swallows RedHat? — Andrew Orlowski of The Register writes . . .

  “It's hard to imagine of a deal that would allow Microsoft to pose as a champion of choice and plurality, but the acquisition of the leading Linux company by dismal media conglomerate AOL/Time Warner may just do the trick.”

  “According to the Washington Post AOL/Time Warner is in 'fluid' discussions to acquire Red Hat, the only consistently profitable Linux operation. 'Fluid' means one of two things: either they're all sitting in a huge jacuzzi, or nothing has been agreed.”

  The sources' affiliations aren't identified, let alone named, and the pairing looks improbable. The two have very different interests that intersect only slightly, and Red Hat's high stock to earnings ratio makes it a poor buy, even for a buyer that urgently needed its assets.”

• Sources: AOL not bidding for Red Hat — CNET's Joe Wilcox writes . . .

  “On Saturday, the Washington Post reported that the media giant was near to cutting a deal with Red Hat in a competitive strike against Microsoft.”

  “Sources familiar with the situation emphatically insisted the two companies are not near an acquisition deal, nor have they discussed one.”

  “Representatives for AOL Time Warner, Durham, N.C.-based Red Hat and Microsoft declined to comment . . .”

• AOL Time Warner says not in talks with Red Hat — Reshma Kapadia and Adam Pasick of Reuters news agency write . . .

  “AOL Time Warner Inc. said Tuesday it was not in talks to buy Linux distributor Red Hat Inc. , 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,' AOL spokesman Andrew Weinstein told Reuters. 'AOL is not in negotiations with Red Hat' . . .”

• AOL-Linux? Why not! — At NewsForge, Jack Bryar writes . . .

  “Apparently the rumored AOL Red Hat 'merger' was little more than that — a rumor, and a silly one at that. But you have to figure that sooner or later AOL and Red Hat have to talk. If the two of them worked together, they might be able to generate a real threat to Microsoft in the consumer market. But could the Open Source community stand it if they succeeded?”

  “Ah, the mischief that can happen over a long weekend . . .

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