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SCO's financial situation worsens

With Novell demanding more money than SCO has left in the bank, the Unix vendor's latest financial results don't make pretty reading
Written by Graeme Wearden, Contributor

The financial situation at SCO, the Unix vendor which claims that Linux violates its copyright, has deteriorated further.

SCO announced results for its last financial year on Wednesday. It made a full-year net loss of $16.6m, compared to a loss of $10.7m for 2005. SCO's 2006 revenue was down, at $29.2m versus $36m in 2005.

The company blamed its performance on "continued competitive pressures on the company's Unix products and services". It recently launched a new version of its SCO office Server and began working on mobile services, but in recent years the company has been known primarily for its litigation.

SCO is embroiled in a legal battle with IBM over its claim that the software giant included SCO's Unix intellectual property within Linux. IBM has denied this claim, and is countersuing SCO. Novell and SCO are also suing each other. Novell claims that it retained the copyright to Unix when it transferred Unix and UnixWare to Santa Cruz Operations (now SCO) in 1995. SCO accuses Novell of slander over this claim.

Novell is also seeking almost all of the $26m (£13m) that SCO has earned in Unix licensing revenue, under the terms of its 1995 deal.

As reported earlier this month, Novell has told the court that is hearing its case that it must rule quickly on this matter, as SCO is close to bankruptcy. SCO reported on Wednesday that its total assets are now $23.4m — less than the amount Novell is seeking from it.

According to legal website Groklaw, SCO chief executive Darl McBride described the results as "not a real pretty picture".

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