Mandrake's crying out for more cash

Troubled times indeed...
Written by Will Sturgeon, Contributor

Troubled times indeed...

Linux seller MandrakeSoft issued a plea for cash late last week, begging with customers to buy products, MandrakeClub memberships or company stock. The firm, based in Paris but drawing much of its revenue from the US, needs $4m to pay debts and cover expenses in order to attain profitability. It's the second time this year the company has sought help from its customers. Co-founder Gael Duval said in a statement: "A very difficult time has arrived for us: We have a very big short-term cash issue." MandrakeSoft isn't the only company to struggle with the business prospects of Linux, an open-source clone of the Unix operating system and one of several technologies once popular with investors. For example, the SCO Group changed its name to emphasise its Unix products, and Lineo, a maker of Linux for gadgets, this week was acquired under its new name Embedix by a Motorola unit. SuSE, based in Germany and second to Red Hat in market share, declined in November to state whether it expects to be profitable for 2002. Rival TurboLinux has sold off a distributed computing software business and retrenched to its Japanese stronghold. Linux companies have seen some business success, however. For example, Red Hat, the top seller of Linux, has edged into profitability. MandrakeSoft held an initial public offering on the unregulated Marche Libre exchange in Paris in 2001. At the time, MandrakeSoft was trying to extricate itself from a change in direction that had seen it move from selling Linux to selling online educational services. The new strategy had sent revenue plunging, and the company was spending about $1.5m per month, according to MandrakeSoft. Stephen Shankland writes for News.com
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