Linspire has been acquired by fellow Linux distro firm Xandros. The acquisition agreement unifies two firms known for their Windows-like Linux distros and content distribution websites, as well as their controverisal agreements with Microsoft over patent protection.

According to the Xandros spokesperson, who confirmed that the acquisition was complete, the agreement was signed on June 19. In a "Q&A with Xandros CEO Andreas Typaldos" FAQ regarding the deal, the CEO explained that Linspire will remain as a wholly owned subsidiary of Xandros, and that its San Diego offices will remain open. Stated Typaldos, "All of the engineering, support, and key sales staff have been retained, apart from a small number of administrative and related resources." In addition, Linspire CEO Larry Kettler will be made VP of Business Development at Xandros, Typaldos will be made Linspire's President, and Linspire's VP of Engineering will report to Ming Poon, the VP of Engineering of Xandros.

The FAQ explained that Linspire's Freespire and Linspire distros will continue to be supported, and there are no current plans at this time to merge them with the Xandros distro. Linspire's ("Click 'N Run") digital download and software management service, which was cited as a key element in the acquisition along with Linspire's "Linux expertise" will also be continued. will support the Xandros platform later this month, says the FAQ, and plans will be announced to integrate CNR with the more modest Xandros Networks content distribution site.

Typaldos also stated, "Xandros and Linspire have had talks at the CEO level over the years about the possibility of a combination given their historically similar Debian-based roots and complementary product lines. Such talks accelerated in late 2007 and culminated in the current agreement." Typaldos went on to state that the acquisition should help Xandros in the enterprise market. With the acquisition complete, he added, "we believe that at this point Xandros is already the third largest Linux Company in the world, and that we may already be the largest private Linux Company in the world."

According to a blog by former Linspire president and CEO Kevin Carmony, the agreement was a "backroom deal" performed without a shareholder meeting. Carmony has been vocal in his criticism of Linspire management, complaining about the lack of shareholder participation in Linspire and the general decline of the company's finances. The latest blog from the disgruntled ex-CEO includes the scanned memorandum to Linspire shareholders announcing the agreement, and indicates that the company had agreed with the Xandros stipulation that Linspire first change its name to Digital Cornerstone, Inc. before the merger could be completed. The FAQ, however, mentioned nothing about a company name change.

A tale of two Windows-esque Linux distros

Linspire pioneered the default incorporation of proprietary software and drivers into Linux with its community-based Freespire 1.0 distribution in 2006. Freespire 2.0 arrived last summer, and in October, Linspire followed up with its commercial version, Linspire 6.0. The new version bundles proprietary software where there are no viable open-source alternatives, providing improved hardware, file type, and multimedia support, such as MP3, Real, Java, Flash, ATI, nVidia, WiFi, and many others.

Version 6.0 was also the first commercial Linux release to incorporate Microsoft technologies, including Windows Media, True Type Fonts, and the Open XML translator. Some penguin purists saw the bundling deal and Linspire's signing of patent protection agreements with Redmond as unpardonable acts of collusion with the "evil empire."

Linspire is also known for its software download site, which it launched in 2002 with the aim of allowing desktop Linux users to find, install, uninstall, manage, and update thousands of software programs on their Linspire-based computers. In January 2007, Linspire opened up the CNR site to support all major Linux distributions. In December, the company announced the arrival of the CNR client beta, which provided support for its Ubuntu-based Freespire and Linspire, as well as for Ubuntu 7.04 and 7.10. In April, Linspire announced a new version of CNR targeting Ubuntu 8.04.

Xandros, meanwhile, is known for its Windows-like Linux distribution, currently in version 4. Xandros 4 has been dubbed by one DesktopLinux reviewer as "the best Linux desktop distro for Windows users." A customized version of the Xandros distro is bundled with the popular Asus EeePC.

After its acquisition of Scalix last year, Xandros has also sold the open-source Scalix email and calendaring software, and it is increasingly moving into mixed-environment management tools via its BridgeWays platform. Xandros recently announced a beta of its Xandros BridgeWays Management Packs at the Microsoft Management Summit. The new product follows up on a broad collaborative agreement between Xandros and Microsoft in June of last year, which included a controversial intellectual property assurance, similar to one hatched between Microsoft and Novell, under which Microsoft will provide patent covenants for Xandros customers.

Stated Linspire Chairman Michael Robertson, "Xandros has emerged as a leader in the OEM, mobility, desktop and PC management and application business, so I'm excited to see the Linspire technology, including CNR, go to a worthy competitor that shares our vision."