Turbolinux confirms investor woes

The Linux company, which has a strong foothold in Asia, confirms it is reorganising US operations after a key investor pulls out of the latest round of financing

Turbolinux, which makes a distribution of the Linux operating system that is popular in Asia, has been forced to issue a statement denying that it has gone out of business, although the company admitted it is restructuring its US operations.

Last week, reports circulated that Turbolinux had been forced to close its doors following the last-minute withdrawal of a key investor from a round of financing. On Friday, in a statement issued to the industry newsletter Linux Today, the company confirmed the investor pullout, but said that the damage would be limited to its US operations. "The result is that we have had to take immediate action to restructure our US operations," said Turbolinux president and chief executive Ly-thong Pham in the statement. The company has already reduced its US staff as of 15 July.

However, Pham said the company would continue operating, even in the US. "We expect to be able to satisfy our US customers' needs for support and future products," he stated.

The investor in question was not identified. Turbolinux was not immediately available for comment.

Turbolinux's funding troubles, which are not unusual in the post-dot-com-crash Linux industry, may also have an impact on a joint effort called UnitedLinux, which combines the server distributions of SuSE Linux, Turbolinux, Conectiva and Caldera into a single standard. However, SuSE said that any change in Turbolinux's status would not affect UnitedLinux's development, as SuSE is responsible for keeping the distribution on track.

UnitedLinux-based distributions are expected to debut later this year.

Turbolinux, which is privately held, said it would release more information on the status of its US operations next month.

The company has been among the many Linux firms hit by a broad downturn in technology spending, and has made several rounds of layoffs over the past months. In May of last year the company called off a merger with Linuxcare, which could have formed an industry giant, and last autumn began emphasising its higher-level software over its own Linux distribution, in an effort to broaden its interests away from operating system sales.

On a more positive note, in January HP agreed to promote and sell Turbolinux's PowerCockpit software for remotely controlling servers.

Turbolinux is based in San Francisco, but has offices in Tokyo, Beijing, Hong Kong, Taipei, Seoul and Slovenia.

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