This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Venture Dollars Flow to Open Source

Godzilla Meets Bambi?

And now open-source companies face competition on their own turf from conventional software giants that include Microsoft (MSFT) and Oracle. The database giant began selling support for Red Hat Linux in late October.

There's some question about Oracle's claim that its support costs are much lower than Red Hat's, but having a giant stomping on one's turf is never good news. Indeed, shares of Red Hat are off 16% since Oracle entered the open-source business. They're now trading at $16.34, a loss of 40% since the beginning of 2006.

Making matters all the worse for Red Hat is the alliance between Novell (NOVL) and Microsoft, announced in November.

Microsoft will use its massive marketing muscle to help market Novell's Suse Linux, and it agreed to a partial truce in the legal wars that slowed the adoption of Linux.

Even so, it would be surprising if at least some of the new crop of open-source start-ups don't grow to profitable maturity.

Investors, however, will have to be patient. The new class of start-ups is probably three to five years away from the kind of growth and stability needed to go public.

Will it be worth the wait? Ask Marc Fleury, the decidedly procapitalist founder of JBoss, the North Carolina-based developer of a popular open-source application server.

His company says Microsoft will use its massive marketing muscle to help mark Novell's Suse Linux snapped up by Red Hat for a cool $350 million earlier this year. Not a bad day's work for a communist.

4 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,922.59 +117.79 0.66%
S&P 500 2,074.66 +4.01 0.19%
NASDAQ 4,773.1550 +7.7750 0.16%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs