Corel may sell Linux business

Troubled Canadian software vendor Corel is expected to announce recovery plans which could include the sale of the company's Linux business.

Troubled Canadian software vendor Corel is expected to announce recovery plans which could include the sale of the company's Linux business.

Industry rumours suggest the company is considering an acquisition of technology for the Linux division, or even a sale. The final announcement will be made next month or in January, said Derek Burney, Corel chief executive.

Burney, who took the helm in the summer following the sudden departure of former chief executive Michael Cowpland, said: "To be successful in the Linux market, you need a wider product offering."

Corel, which is best known for its CorelDraw and WordPerfect products, entered the Linux sector last year promising huge turnover. The company has so far sold $6.1m worth of Linux products. "There has got to be some kind of acquisition," Burney said, but he added that the decision could "go either way".

Corel has developed a range of Linux products, including a desktop operating system and Linux versions of its software products.

The company has already cut 21 per cent of its staff this year - a total of 320 employees - as part of a plan to save $40m.

However, salvation came when a mysterious benefactor (which turned out to be Microsoft) handed a lifeline to the company by buying 20 per cent of Corel stock estimated to be worth $50m.

Shares in Corel dropped as low as C$5.05 on the Toronto Stock Exchange last week before rebounding to C$5.20. The stock peaked at C$64.65 last December amid a Linux frenzy on the markets.