Jeff Covey has responded to the demise of freshmeat/freecode by reminiscing about his past at Freshmeat. He reports a rumor that VA bought Andover just because the CEO thought it would be cool to own Slashdot.
I set the record straight in a comment on the post. No, that’s not why it happened; Larry Augustin never would have made a business decision for a reason that flimsy. In fact, buying Slashdot was my idea, and I had a solid reason for proposing it. The rest of my comment explaining this follows.
I can supply a missing piece of the story. VA Linux’s purchase of Andover was my idea.
Here’s how it happened. It was just after the record-breaking IPO, and the U.S.’s crazy accounting rules more or less forced us to do an acquisition to maintain our valuation. There were four acquisition targets short-listed: Andover, SGI, SuSE, and a Linux service business I forget the name of that cratered spectacularly not long after. The other board members argued back and forth but were unable to reach a resolution
Up to that point I had been pretty quiet in the board meetings, keeping my mouth shut and my ears open. It was with considerable surprise that I realized that I remembered something basic that the other directors had forgotten – most mergers fail through cultural incompatibility between acquirer and acquiree. I’ve never been to business school, but I hear that anyone who does learns this early.
So I stood up and reminded everybody about the compatibility issue and made the case that our first acquisition needed to above all be an easy one. Then I said “At Linux conferences, think about which of these crews our people puppy-pile with on the beanbag chairs.” Light began to dawn on several faces. “The Slashdot guys. It has to be Andover, ” I said.
Silence. The king-shark VC on the board, Doug Leone, thought for a moment and said “There’s a lot of wisdom in that.” And so it was decided.
That is the only time I recall driving a major decision at VA, but it was enough to earn my stock options. Media businesses like Andover don’t deliver huge growth, but they’re reliable cash cows. Which turned out to be exactly what VA needed to survive the dot.com bust and eventually morph into GeekNet.