Salon Technology | Red Hat snags Atomic designers

July 16, 1999 | For weeks rumors have been circulating in the Web designer community that Red Hat, the leading U.S. vendor of packaged Linux-based operating systems, had purchased Atomic Vision, a well regarded San Francisco design studio. On Thursday, Bryan Scanlon, a public relations representative for Red Hat, denied that Red Hat had acquired the design house, but confirmed that "many former employees of Atomic, including [founder] Matthew Butterick, are now employees of Red Hat."

Why would a Linux company want to expand into Web design? Neither Red Hat nor Butterick would comment further, citing SEC regulations -- Red Hat, which filed for a public stock offering in June, is currently in the SEC-imposed "quiet period," which forbids the company from making comments that could be construed as hyping Red Hat stock. But clues to Red Hat's strategy can be found in the part of the prospectus outlining the company's future business strategy.

In the prospectus, Red Hat declares that sales of Linux distribution packages and revenue generated from support and service contracts will not be the company's sole income stream. Red Hat noted that its Web site is poised to attract heavy traffic as the Linux market grows and the company plans to leverage that traffic to attract advertising revenue.

Portal strategies are a dime a dozen in the Internet economy these days, especially in the SEC filings of companies aspiring to go public. Cynics could be excused for interpreting Red Hat's portal emphasis as a sop thrown to potential investors looking for a reason to rationalize participating in Red Hat's public offering.

But Red Hat's mass employment of Atomic Vision designers suggests the company is quite serious about expanding its portal possibilities. And that, naturally, raises even more questions. Linux portals abound -- it will be interesting to watch how Red Hat's buffed up Web design division differentiates itself from the rest of the crowd.
salon.com | July 16, 1999

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Andrew Leonard is a senior correspondent for Salon Technology.

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