AOL Time Warner is in negotiations 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, according to sources familiar with the matter.
Red Hat, a publicly traded firm based in Durham, N.C., sells products and services based on the Linux operating system, the freely available software developed collaboratively by volunteers.
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.
To counter Microsoft's desktop hegemony, New York-based AOL Time Warner could use the deal to couple its America Online software, the market leader with more than 33 million Internet subscribers, with Red Hat's operating-system technology, sources said.
Officials of AOL, Red Hat and Microsoft declined to comment.
News source: Washington Post