Microsoft, Red Hat Make Moves to Strengthen E-Commerce

The first of these agreements was made by Microsoft Corp. on Thursday, in a press release Microsoft announced that they had formed a "Strategic Alliance" with Tandy Corp.'s RadioShack to "accelerate the adoption of Web
technologies and consumer connections to the Internet." In this deal, RadioShack will create Microsoft "MSN stores" within as many as 7,000 of
it's locations. These "MSN stores" will showcase demonstrations of MSN dial-up and broadband Internet access, as well as WebTV, WindowsCE
devices, and other Microsoft products, with the goal of broadening its role in the dial-up and home-networking markets.

Holding up its side of the deal, Microsoft will make a $100 million dollar equity investment in the newly launched RadioShack.com, in hopes of developing it into a leading e-commerce site while also furthering it's
role in the e-commerce market. Radioshack.com will utilize Microsoft's e-commerce software, following the pattern of Monster.com,
1800Flowers.com, and other e-commerce sites Microsoft has endorsed.

In an indirect response to Microsoft's agreement, Red Hat Software made steps to further its role in the Internet server, and e-commerce markets as well Friday, by signing a licensing agreement to use the popular RSA encryption
software in its "Professional" release of its Linux OS. The deal boosted RSA's stock 2 3/16, a sure sign of market approval, in gathering
Linux hype. The agreement will have the greatest impact on businesses looking for the most secure method of data transactions on the market
trough the use of RSA encryption and the stability of the Linux operating system.

"Our use of RSA Security's e-security technologies in our products will
help position Red Hat Linux as one of the world's most secure platforms
for conducting e-commerce," said Red Hat Chairman Robert Young, in a
press release.

The two companies are working together to implement RSA BSAFE SSL-C, Secure Socket Layer technology, and implementation of enhanced security functionality in the new version of the Red Hat Linux "Professional
Edition".

In a surprising move, Red Hat Software also announced that it plans to acquire Cygnus Solutions, a leader in open source software, in a transaction valued at $674 million based on Red Hat's November 12 closing price. The
transaction, which is still subject to approval by Cygnus' shareholders,
is to be a "stock-for-stock merger" in which Red Hat will issue up to 6.6
million shares for all of the outstanding Cygnus shares.

Matthew Szulik, current president of Red Hat, will head the merged
companies as president and CEO, in a press release he said:

"Cygnus has enormous experience and technology leadership in software
development and embedded platformsThe merger will create a single,
worldwide source that lets developers rapidly create Linux applications
for servers and small devices --- accelerating the adoption of open
source technologies in enterprises worldwide."

This will make RedHat the worlds largest company dedicated to open source
technologies.

These agreements seem to point the two companies in two different
directions, Microsoft it seems plans to focus on the consumer side of
e-commerce while at RedHat's focus is on the enterprise business side of the
market. Be on the lookout for
more moves in the e-commerce war, it's far from over, and we will always be on top of it here at eFront.