AOL in Negotiations to Acquire Red Hat

Luis Villa
19 Jan 2002 23:59:42 -0500

On Sat, 2002-01-19 at 22:43, Eirikur Hallgrimsson wrote:
> Hmmm.  The points about Mozilla and Winamp are good ones.
> So, Mozilla is the farm league for Netscape, from their perspective anyway.
> How DO they make money from Winamp?  Not to mention that it was Nullsoft
> (the Winamp gang) who unleashed Gnutella.

One could probably ask the same of Netscape, really. I think the real
reason they've got NS and Winamp (and why they'd want RH) is leverage
and independence. Think about it: AOL is a distribution company. They
want to integrate vertically, so as to maximize their profits and
minimize the 'inefficiencies' of capitalism. The start of that was to
buy TW, to provide content. And now AOL/TW buys pipes, to deliver the
content. The problem is that they can buy those with cash. The final,
logical step is to buy /all/ the software, so that they can eliminate
the inefficiency of fighting with and/or paying off the other software
companies. But they can't buy that with cash, because in the end that
means buying MS. And so since they can't use cash (their traditional
source of leverage over pieces of their business) they have to use other
sources of leverage. Winamp doesn't make them money; it saves them money
when they negotiate with Real. Mozilla doesn't make them money; it saves
them money when they negotiate with the maker of that other browser. RH
(probably) won't make them money; it'll give them leverage when they
need a cheap license for WinCE for AOL-embedded set-top boxes. And of
course all of these things are also an insurance policy- they can afford
to commission RH to build them an entire custom OS and then keep it in a
closet until the day of the final showdown with Bill and Co., in case,
despite their cash and leverage, they lose.

Anyway... that's my two cents before my roommate screams at me for
writing email on a Saturday night :)

> Winamp is a nice program.   Stable, too.  You really get to appreciate it, 
> if you, as I have, pour through the code of xmms, the 'Free as in libre' 
> clone.  And the Winamp guys have to do all that in Windows.  Xmms is going 
> to be a LONG time catching up to the scripted skins in the forthcoming 
> Winamp.   I think.... 
> Apropos of nothing, I used a sniffer to look at what the Winamp 3 Alpha 
> does to fetch the list of streams for its 'streams tuner' feature.   What 
> comes back is pretty weird.  It has an XML header and then a stream of 
> what looks like binary. 
> You don't want the Winamp Alpha for Linux x86.   For the moments before it 
> crashes, it uses an awful lot of CPU just to render MP3.    Good proof of 
> concept though.   Obviously their porting tools are working very well save 
> for window positioning and the MP3 decode loop.   They say they aren't 
> putting any work into it until they have feature-freeze (and maybe ship) 
> on Windows.