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Corel takes stake in Linux start-up

The Canadian software developer continues its Linux tear with the announcement that it plans to acquire a 30 percent stake in Newlix, which makes networking server software based on Linux.

Business software developer Corel continues to embrace all things Linux.

Ottawa, Canada-based Corel today said it plans to acquire a 30 percent stake in privately held Linux start-up Newlix. Terms of the deal were not disclosed.

Corel has been on a Linux tear in the past few months. Last month it acquired a one-third stake in Philadelphia-based LinuxForce.

Linux is a Unix-like open-source operating system available for free or at very low cost from several companies. It's currently popular for use in servers, and many believe Linux competes both with Microsoft Windows and with various versions of Unix.

Linux also has attracted Wall Street's attention--so much so that the mere mention of a Linux strategy has sent some companies' stock flying recently.

Corel, in particular, can use the boost of high-profile Linux deals. Its stock plumetted following the news last month that chief financial officer Michael O'Reilly had resigned.

Shares in the company inched up 0.25, or 1.31 percent, to $19.31 in midmorning trading today. Corel stock has traded as high as $44.50 and as low as $2 in the past 52 weeks.

Newlix makes networking server software dubbed Omega, based on Linux, designed for small to medium-sized businesses. It can connect up to 50 PCs and "handles Internet connections and email, sends files to printers and personal computers and can incorporate a security firewall," according to the Ottawa-based company.

Michael Cowpland "This deal illustrates Corel's continued commitment to providing a complete end-to-end Linux solution," Michael Cowpland, chief executive of Corel, said in a statement. "The Omega server software is based on hot Linux technology and Corel looks forward to working alongside Newlix to develop an integrated and easy-to-use solution."

The deal also will affect Corel's relationship with LinuxForce. "The Newlix deal confirms the decision LinuxForce recently made to accept Corel's offer of affiliation," LinuxForce chief executive Charles Fleming said in a statement. "The Newlix Omega server will directly address the needs of many of our small to medium-sized customers. With Corel's input and assistance, it will provide an outstanding solution for us to bring to LinuxForce's growing customer base."