AOL considering Linux device, sources say

One source said America Online has approached Compaq Computer as a possible manufacturer of a Linux-based AOL access device. Independently, Compaq is developing a television set-top box based on Linux, sources said.

As Linux spreads down into more consumer-oriented devices, it becomes a better and better way for America Online and others to wean themselves of dependence on Microsoft Windows. But this is by no means a "Microsoft killer"--AOL, while exploring options for getting users to its site, isn't likely to abandon Windows altogether. The company's chief concern remains delivering content to its subscribers rather than the underlying technology subscribers use.

In general, AOL believes that "no one company or technology" has established the path to broadband service, chief financial officer J. Michael Kelly said. "There are multiple sources, like wireless, DSL, and cable solutions. We hope to gain access to all of that," he said.

"The feasibility of [an AOL-Linux project] is highly possible," said International Data Corporation analyst Bill Peterson. With an increasing number of applications running within a Web browser, the "underlying operating system becomes less and less important," he said.

However, Sean Kaldor, also of IDC, was more cautious about using Linux in smaller devices. "The advantage is zero cost per unit. The disadvantage is that it's big and will require some engineering" to fit into small devices. The balance will be in choosing between paying for an operating system already designed for small devices and paying for the larger memory requirements of Linux, he said.

Both agreed that bypassing Windows gives AOL an advantage, ensuring more control over their product, lowering the cost of the device, and improving AOL's bargaining position in dealings with Microsoft. "They are big enough where [Microsoft and AOL] are kind of titans of the industry," Kaldor said.

Although AOL declined to comment on the subject, sources said a Linux thin client would give AOL an inexpensive Internet connection device that would boot straight into an AOL browser. The user, though, would never need to know that Linux was underneath.

AOL isn't alone in considering Linux. Consumer electronics powerhouse Sony is in "initial discussions" with Linux seller Caldera Systems about "how they can embed Linux into some of their consumer line of products," said Benoy Tamang, vice president of marketing at Caldera Systems. "Everyone's turning rabid looking in at the possibilities."

"It makes perfect sense," said Drew Spencer, vice president of engineering at Caldera Systems, a company that sells Linux. "Linux is at its core an operating system built for communicating with the Internet. Internet networking protocols are an intrinsic part of the operating system."

Spencer declined to comment on whether Caldera Systems was working with AOL on such devices, but he did say "there are a lot of pilot programs right now" investigating Linux clients. "In eight to 12 months, we'll likely see some deployments beginning to happen."

AOL has declared its intention to provide access to its services from non-PC devices through its "AOL Anywhere" plan, a plan that pushes AOL out of the PC realm where Microsoft enjoys its dominant status.

Linux currently has a stronghold as an operating system used for servers and programmers' workstations, but Linux leader Linus Torvalds and others have expressed interest in pushing it into cheaper consumer devices as well as more powerful servers. At present, The Linux Store and The Computer Underground are marketing sub-$500 computers, and Corel is developing an easy-to-use Linux version it says will power sub-$300 computers.

Red Hat could be another key player in AOL's Linux plan, according to one industry source. AOL inherited Netscape's investment in Red Hat, and the source said Red Hat and AOL have discussed the idea.

"This is a really compelling idea," said John Stracke, a Linux developer, former Netscape employee, and now chief scientist at eCal. "[AOL] could do it pretty easily." With a limited-function box, including a version of Linux whittled down to only what's needed, "they could do it for about $300," Stracke said.

Memory a key concern
One of the critical issues for such a device is how much memory it requires. Analysts have noted that in the consumer space, hardware resources are at a premium, and browsers such as Netscape Navigator and graphical interfaces such as Xfree86 for Linux take up many megabytes of memory.

"If you look at [Netscape] Communicator or Navigator with Java support, it's quite large, particularly when running the Java virtual machine," Spencer said. "It's a function of how small you can make a browser that's still full functional enough to take advantage of all the new features on the Web."

Spencer said Linux isn't good right now for the smallest of computing platforms such as 3Com's PalmPilot. But it could be made to work in a handheld computer such as those currently based on Microsoft Windows CE, he said.

Linux is good because of price and robustness, said Erich Forler, product device manager for Corel's forthcoming Linux edition. "When price becomes an issue, the price of the operating system becomes an issue," he said. John Wise, chief information officer of The Linux Store, said Windows is second only to the hard disk as the most expensive component in his company's sub-$500 computers.

Forler worked on Corel's development of the Netwinder Linux machine, diminutive boxes now under the control of Rebel.com, formerly known as Hardware Computing Canada. Corel and top Linux seller Red Hat jointly developed a version of Linux that work on the Netwinder, a computer based on Intel's StrongARM chip.

NetBox a model?
French hardware maker NetGem has taken an interesting Linux step, deciding to switch from its own operating system to Linux for its inexpensive set-top boxes for Net access, an arrangement similar to Microsoft's WebTV. "Linux provides us with a more stable platform, a faster platform, and a more open platform," said David Ostroff, NetGem's business development director.

NetGem's NetBox machine seems to match AOL's plans. The NetBox is designed only for Web browsing, email, and electronic commerce activities such as banking, and when it's turned on, it shows whatever splash screen the seller desires.

NetGem's NetBox, which is in beta testing now and will be available by the end of June, has limited hardware, Ostroff said. For example, it doesn't even have a hard disk. It uses either telephone lines or a cable modem to connect to the Internet, and because it comes with an Ethernet port, it can be used to give a PC a high-speed connection as well.

But it does have some serious possible partners. European electronics giant Grundig, for example, sells a version of the NetGem's current products, and other European companies distribute the product to home users in exchange for a monthly Internet access fees, Ostroff said.

"We are confident the Linux box is going to provide the kind of speed and stability customers are looking for," Ostroff said.

News.com's Dawn Kawamoto contributed to this report.