Daemon News will produce its edition beginning with version 4.5, expected in late December or early January, spokeswoman Deborah Nelson said.
In addition, the group is in discussions with several FreeBSD employees laid off by Wind River, said Don Witt, vice president of sales.
"Our intention is to bring on FreeBSD staff," he said.
Daemon News plans additions in the coming 4.5 version with programs that will make FreeBSD more suitable for desktop use, Witt said. Versions of the software cost $24.95 each and are released roughly three times a year.
FreeBSD is a separate project from Linux, a Unix clone, but shares some of the cooperative "open-source" development methods as does Linux.
FreeBSD is part of the underpinnings of Apple's Mac OS X. Apple hired lead FreeBSD programmer Jordan Hubbard in June. Daemon News already sells a CD of the open-source "Darwin" components of OS X, Witt said.
A Wind River representative said the company laid off 12 FreeBSD personnel on Oct. 5, and that the remaining four programmers working on version 4.4 will be retained until that product is complete.
The company decided to "stick with its core competencies, and supporting FreeBSD was not a core competency," the representative said.
The Wind River cuts, part of a second round, were spurred by dropping revenue. To cut costs, the company also has ordered mandatory shutdown days.
Wind River acquired Berkeley Software Design Inc. (BSDi) in April to bolster its operating system strategy and try to tap into the enthusiasm of the open-source world. Since then, Wind River had been selling and supporting the development of FreeBSD, as well as its cousin, BSD/OS, both of which BSDi had supported.
At the time of the acquisition, Wind River said it "will support the FreeBSD Project, as BSDi has in the past. Wind River is committed to sustained development, enhancement and distribution of FreeBSD."
The company also said it was "providing this open-source project with operational and technical support, marketing and funding. These steps are expected to promote and invigorate the FreeBSD open-source computing movement."
Yet the rise of Linux in the embedded market has presented new challenges. A host of companies such as Lineo and MontaVista began backing Linux for use in non-PC "embedded" computing devices such as set-top boxes or handheld computers, putting pressure on Wind River. Wind River argued that BSD was superior to Linux, though, because the BSD license allows a company to use the software in proprietary closed-source projects.
Wasabi Systems, based in New York, released version 1.5.2 of NetBSD in late September. The company has been working to translate the operating system to various CPUs, including embedded chips from IBM, and AMD's coming 64-bit "Hammer" family.