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Geeknet, Inc.

Type	Public (NASDAQ: LNUX)
Founded	1995[citation needed]
Founder(s)	Larry Augustin & James Vera (VA Research)
Headquarters	Mountain View, California,
Key people	Scott L. Kauffman (President & CEO)[1] Robert M. Neumeister Jr. (Chairman)
Industry	Online media; retail
Services	Freshmeat; Ohloh; Slashdot; SourceForge.net; ThinkGeek
Total assets	74.2 million USD (unaudited 2008-12-31)[2]EX-99.1
Total equity	62.6 million USD (unaudited 2008-12-31)[2]EX-99.1
Owner(s)	William M. Sams (21.5%) institutional investors (18.1% combined) (all others under 5% each)[3]
Website	geek.net

Geeknet, Inc. (NASDAQ: LNUX) is a Mountain View, California company that owns several computer tech-related websites and the online retailer ThinkGeek. Formerly known as VA Research, VA Linux Systems, VA Software, and SourceForge, Inc., it was founded in 1995. As of November 2009^[update], Geeknet owns the websites Freshmeat, Ohloh, Slashdot, and SourceForge.net.

[edit] History

This section requires expansion with: history of purchased companies.

[edit] VA Research

LNUX stock price (9 December 1999 through 9 December 2000)

VA Research was founded in 1995 by Stanford graduate student Larry Augustin^[4] and James Vera.^{[citation needed]} Augustin was a Stanford colleague of Jerry Yang and David Filo, who went on to found Yahoo!.^[4] VA Linux built and sold personal computer systems pre-installed with the Linux operating system as an alternative to much more expensive Unix workstations available at the time. At the time they started operations, they were one of the first computer vendors to offer Linux as a pre-installed operating system.^{[citation needed]} During the initial years of operation, the business was quite profitable and grew quickly, with over $100 million in sales and a 10% profit margin in 1998^[5] and was the largest vendor of pre-installed Linux computers, having approximately 20% of the Linux hardware market.

In early 1999, VA purchased their top competitor, Linux Hardware Solutions. As part of this merger, they began to make plans for an initial public offering (IPO). VA also won a business plan competition that year for the right to operate the linux.com domain, although it was rumored that Microsoft and other bidders (Compaq, Red Hat, HP) had offered more cash but less plan for the domain.^[4]

[edit] Initial public offering

VA Linux is notable because of its IPO on 9 December 1999. The shares for the IPO were offered at $30, but the traders held back the opening trade until the offers hit $299. LNUX later popped up to $320, and closed their first day of trading at $239.25, a 698% return. However, this high-flying success was short-lived, and within a year the stock was selling at well below the initial offer price. As of 2005^[update], this is still the most "successful" IPO of all time. The stock price reached an intra-day nadir of 54 cents on 24 July 2002. It then soared more than 1000% to an intra-day high of $6.38 on 11 September 2003. As of 26 November 2006, the stock closed at $4.64.^[6]

Many authors of free software were invited to buy shares at the initial price offering as part of a friends and family deal.

Due to the immense difference between the IPO offering price and the opening price, VA Linux did not actually raise much capital in the offering, and the stock price sagged as investors realized that the company's revenue and profitability were not likely to justify the share price. However, on 3 February 2000, the company announced that it was acquiring Andover.net (itself a recent IPO company).^[7] This gave them popular online media properties such as Slashdot, Andover News Network, Freshmeat, NewsForge, linux.com, Kuro5hin (until 2001^[8]), and a variety of online software development resources, as well as a stable of writers such as Rob Malda, Robin Miller, Jack Bryar, Rod Amis, Jon Katz, and "CowboyNeal". Shortly after, all assets of Andover.net were transferred to a new division of VA Linux called Open Source Developers Network^[9]. The acquisition was not without controversy in the Linux community. Bryar, in particular had written multiple articles suggesting that most Linux businesses were poorly thought out. He cautioned that the excitement over Linux was little more than another Internet bubble. Nonetheless, this acquisition eventually allowed the company to shift its business model from Linux-based product sales to specialty media and software development support.

[edit] VA Software

The company's original equipment and systems business model began to encounter stiff competition from other hardware vendors offering Linux as a pre-installed operating system (Dell, in particular), and the company began to experience operating losses. Eventually, on 26 June 2001, VA Linux decided that they would leave the systems hardware business and focus on software development.^[10][8] During the summer of 2001, there was a large staff reduction since all of the hardware focused employees were dismissed as a result of this shift in the core business model.

On 6 December 2001, the company formally changed its name to VA Software in recognition that the majority of their business was now software development and specialty news and information services. However, the company's Japanese subsidiary still goes by the name of "VA Linux Systems Japan K.K." after the parent company changed its name. In January 2002, Sumitomo Corporation became the largest shareholder in VA Linux Systems Japan, and the Japanese subsidiary became independent of VA Software.

Open Source Developers Network (OSDN) was renamed to Open Source Technology Group (OSTG). ^[11]

[edit] SourceForge

Sourceforge Inc. logo

On 24 May 2007, the company changed its name to SourceForge Inc. and merged with Open Source Technology Group:^[12] therefore, the latter does not exist anymore as a separate entity.

On 4 December 2008, Scott Kauffman was announced future President and CEO of SourceForge, Inc. Robert M. Neumeister, Jr., Chairman of the Board of Directors of SourceForge, describes Kauffman as having "the level of energy and vision that we believe will help build SourceForge into a major Internet company. He brings more than 20 years of executive experience in digital entertainment and consumer-facing Internet brands. The team is extremely excited to be adding an individual with such rock-solid leadership skills and experience."

On 5 January 2009, Scott Kauffman was appointed President and CEO of SourceForge, Inc.

[edit] Geeknet

On 4 November 2009, SourceForge, Inc. became Geeknet, Inc.^[1] by creating the latter company and merging SourceForge into it.^[2]EX-3.1

[edit] Operations

Geeknet operates SourceForge.net, Slashdot, Ohloh and Freshmeat. SourceForge licensed SourceForge Enterprise Edition to enterprise organizations. ThinkGeek — an ecommerce site — is also under the SourceForge banner. VA Software sold Animation Factory to Jupitermedia Corporation on 27 December 2005,^[13] and SourceForge Enterprise Edition to CollabNet on 24 April 2007.^[14] On 24 May 2007, the company announced its name change from VA Software to SourceForge, Inc.^[15]

[edit] Earnings

On 21 February 2006, VA Software reported its first ever profitable quarter.^[16] Net income for the second fiscal quarter stood at $10.5 million, or 17 cents per share, compared to a net loss of $702,000, or a penny a share, in the previous year's second quarter. Excluding one time gains from the sale of Animation Factory, VA's profit that quarter would have been $1.1 million, or 2 cents per share.^[16] VA followed this performance with two more consecutive profitable quarters, earning $1.1 million in 3rd quarter 2006^{[17][citation needed]} and $700,000 in fiscal 4th quarter 2006,^{[citation needed]} which ended on July 31. VA ended the fiscal year with $51.9 million of cash, up from $36.6 million the previous year.^{[citation needed]} The company remained profitable until the fourth quarter of 2007 but then returned to continuous losses (as of the second quarter of 2009).

[edit] References

[edit] External links

• Geeknet — official site
• CNET: VA Linux files IPO plans (9 October 1999)
• Salon: Dissecting the VA Linux IPO (10 December 1999)
• CNET: VA Linux leaves hardware, lays off workers (27 June 2001)
• Wordpress: Va Software reports first profits ever. 60% stock rise before the report and 40% after. (23 February 2006)
• VA Linux Systems Japan K.K.
• Aservo - Distributor of SourceForge Enterprise Edition in Europe