Thursday Newswatch: Ellison trying to crush RedHat? NewsCorp cash hard to Digg up.
By Richard Koman - October 26, 2006
Digging for sell-out cash
Digg has been trying to dig up some gold from News Corp and several other suitors, TechCrunch says. But while there's been interest, none of it has reached the level that the Diggers think it's worth, about $150mn. Thus the SF company will probably opt for $5mn or so in second round money from Greylock Partners, already a Digg investor.
Ellison plays hardball with Redhat
At OracleWorld yesterday, Larry Ellison said it would undercut RedHat at its own game - offering maintenance services to RedHat customers for less than the Linux vendor charges, AP reports.And not undercut a little bit. Undercut as in 50 percent discounts. RedHat's stock plunged on the news. At this writing, RedHat stock is down 26 percent from yesterday's close. Now the question is: Is RedHat ripe for a takeover? Not Oracle's intention, Ellison deadpanned:
"I don't think this will kill Red Hat. This is capitalism. We are competing."
Analyst Trip Chowdhry says IBM is a more likely suitor than Oracle. Ellison's move could cut RedHat's revenue by $40 million to $50 million annually. With total revenue of $278mn last year, no way Red Hat can swallow that loss. Still, RedHat CEO Matthew Szulik spun furiously:
"There are always concerns, but keep in mind that Oracle ... acknowledged that Red Hat is the technical leader in the market," Szulik said. "We still have a rich product pipeline. We will compete."
Apparently RedHat's purchase of JBoss for $350mn and talk about software as commodity pissed Ellison off. Said consultant Josh Greenbaum: "Larry plays a hardball game. This shows he hasn't lost his touch for savvy moves or drama."
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