March 11, 2002 5:40 PM PST

Mandrake Linux looking for users' cash

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Mandrake, a French company that sells Linux, is encouraging users to join for-fee clubs to provide enough money to keep the company in business.

The company hopes to break even by the end of the year, but in the meantime, finances are worrying the company, MandrakeSoft said on its Web site.

"The Mandrake Linux distribution's short-term future is in jeopardy due to a simple factor: money," the company said. "It is unlikely that MandrakeSoft can remain unchanged during these next few months without drastically cutting costs unless additional revenue is generated quickly."

To raise funds, Mandrake urged people to join the Mandrake Linux Users Club, which costs $5 per month or more, and the Mandrake Corporate Club, which costs between $2,500 to $100,000 per year.

Mandrake has been marketing subscription plans since last year.

Individual club membership benefits include discounts, chat privileges with Mandrake staff and access to discussion groups. Corporate benefits include special product offers, faster software downloads, and display of sponsors' names on Mandrake products and Web sites.

Mandrake braved the initial public offering waters in 2001 and is trading on an unregulated European market called the Marche Libre, but the money raised wasn't enough to reach profitability as the company hoped. The company's stock currently trades at $3.43, giving the company a market capitalization of $11.7 million.

The IPO was a far cry from that of rival Red Hat, which raised $84 million back when Linux was awash in hype as a way to power Internet sites and undermine Microsoft's power. The software has succeeded in servers, but hasn't dethroned Microsoft or been much of a foundation for corporate profits among those selling the software.

Mandrake expects shortly to release version 8.2 of its software, which includes support for devices that can be plugged in and unplugged while the computer is still running, a better graphical user interface, and an encrypted file system to increase security.


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