December 2, 1999 9:00 AM PST

Intel invests in European Linux seller

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Intel has invested in a third Linux seller, SuSE, which makes a version of the operating system that is popular chiefly in Europe.

Intel and venture capital firm Apax Partners together invested about $12 million in the company, SuSE said in a statement. The funding will be used to set up new sales and support offices across the world and to improve its ability to help companies set up Linux systems, SuSE said.

Linux is a clone of the Unix operating system. The software and its underlying programming instructions are available for free, but companies such as SuSE make money by selling the software bundled on CD-ROMs with installation help, instruction manuals, technical support, bundled extras and other refinements.

Intel also invested in Red Hat in 1998 and in TurboLinux in October.

The chip giant rose to prominence because of its tight coupling with Microsoft operating systems. But for a while now, Intel has been trying to bring many operating systems to its chips. The effort--in particular, its next-generation IA-64 chips--is aimed squarely at competing chips from IBM, Sun Microsystems, Compaq Computer, Hewlett-Packard and others.

"Intel is investing in SuSE because we want to encourage the diffusion of Linux on Intel-based computers in Europe," Intel's Tim Keating said in a statement.

In March, Intel also invested in VA Linux Systems, a Linux computer maker expected to hold an initial public offering soon.

While Intel's investments help the companies fund expansion efforts, they also can be a financial boon. Intel's purchase of 3,005,058 shares of Red Hat at a price of $3.141 cost Intel $9.44 million. With Red Hat's stock at 221.5 in morning trading, that investment now is worth more than $646 million.


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