AOL sets its cap at Red Hat

US media and internet giant AOL Time Warner is set to buy Linux expert Red Hat in an attempt to position itself against Microsoft in the operating systems market, according to the Washington Post .

The newspaper cited unnamed sources in a weekend report claiming that AOL was in talks to buy the distributor of the Linux open source operating system.

Any such purchase would set AOL up in direct competition with Microsoft, whose Windows operating system runs around 90 per cent of the world's PCs.

This would be the latest battle between the two, after competing for online subscription services, web-based media players and instant messaging offerings.

The Washington Post said that neither AOL, Red Hat or Microsoft would comment.

Red Hat has a market capitalisation of $1.45bn and around 600 employees worldwide, and the Linux operating system has received wide industry backing, both financial and technical, especially from IBM.

The source is reported to have suggested that AOL could join its internet service with Red Hat's operating system, overriding Windows and launching a version of Linux.

But Quocirca analyst Clive Longbottom doubted that the acquisition would add significant value to AOL.

"In some ways there's some sense there, using Red Hat as the platform of choice for edge servers, caching, firewalls and such," he said. "But where's the value add for AOL if the deal goes through? Where would they make their money? AOL is a content provider and would have to work with other specialists to make something of Red Hat."