May 3, 2001 2:25 PM PDT

Second Linux merger canceled this week

Linux NetworX and Ebiz Enterprises have called off their merger, the second time this week Linux companies have backed off from plans to join forces.

Ebiz announced in March it had agreed to acquire Linux NetworX, which builds low-cost supercomputers made of networked Linux machines. Ebiz sells a host of Linux products, including inexpensive PCs, other companies' servers and software and doo-dads such as Linux keychains.

Now the companies won't merge, agreeing instead to a partnership under which Ebiz will make and sell Linux NetworX's computers, said Clark Roundy, vice president of marketing and sales at Linux NetworX.

"One of the things we were really interested in is their sales channel and their manufacturing capabilities. As we started working with them, we discovered we can do that without becoming part of the company," Roundy said. "The goal is to remain independent if we can."

"Other opportunities," which Roundy declined to detail, meant that Linux NetworX could remain independent, he said.

The news comes two days after Turbolinux and Linuxcare canceled their merger plans after operating as a single company for three months. While a connection to the hype surrounding the Linux operating system had meant fast access to venture capital cash in earlier years, diminished business enthusiasm for the operating system has meant hard times for many Linux companies.

 

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