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Michael Robertson Sued Over Missing Linspire Cash

Posted by ScuttleMonkey on Fri Oct 03, 2008 03:39 PM
from the transparency-whether-you-like-it-or-not dept.
Government The Courts Linux Business News
An anonymous reader writes "Blogger and ex-Linspire CEO Kevin Carmony reports that Michael Robertson has been sued by a Linspire shareholder to get to the bottom of what happened to Linspire's assets. One hundred shareholders have been left uninformed as to what happened to the company and its assets after Linspire was sold to Xandros a few months back."
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[+] Linux: Xandros Reportedly Buys Out Linspire 153 comments
2muchcoffeeman writes "Former Linspire president and CEO Kevin Carmony — whose relationship with his former employer has turned acrimonious, to say the least — reported on his blog that Xandros and Linspire signed an agreement in principle for Xandros to buy Linspire June 19. Carmony includes a scan of the memo to Linspire shareholders announcing the deal, which requires the former Linspire company to change its name. According to the memo, the stockholders voted to change the company's name to Digital Cornerstone, Inc. Despite the wording of the Linspire memo to stockholders, this deal apparently came as a surprise to Carmony and other stockholders. Some here may remember that both Xandros and Linspire signed patent protection deals with Microsoft in 2007."
Submission: Michael Robertson Sued Over Missing Linspire Cash by Anonymous Coward
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Michael Robertson Sued Over Missing Linspire Cash 50 Comments More /

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  • Isn't it obvious? (Score:4, Funny)

    by Anonymous Coward on Friday October 03 2008, @03:43PM (#25250821)

    He freed the money as part of his Open Vault Software initiative.

  • What assets? (Score:3, Funny)

    by Onaga (1369777) on Friday October 03 2008, @03:45PM (#25250837)
    Linux isn't profitable...

    • Re: (Score:1)

      by Anonymous Coward

      Here is a serious side of that question, since I am seriously curious: What did Linspire earn money from? How do they make $20 million in profit when anybody can download their competition, Ubuntu and CentOS and etc, for free? What was their business model and who was paying them money?

      • Re:What assets? (Score:4, Informative)

        by wastedlife (1319259) on Friday October 03 2008, @07:21PM (#25252565) Homepage
        OEMs. A lot of the cheap-ass linux desktops at Fry's and Walmart used to be sold running Lindows/Linspire (I think gOS and Xandros have stolen that market). Also, I believe they were looking to sell their "Click N Run" package manager for use in Ubuntu and possibly other distros.

  • ...other than the caption in the article, "Michael Robertson - Greedy, crook or just incompetent?"

    Then I found this earlier entry: http://kevincarmony.blogspot.com/search?updated-max=2008-07-12T08:40:00-07:00&max-results=7 [blogspot.com]

    It gives details on the company's structure and what Roberts was doing to steal money from the company. Interesting stuff.

  • Ummm... (Score:4, Informative)

    by Darkness404 (1287218) on Friday October 03 2008, @04:13PM (#25251081)
    I fail to see how Linspire was ever profitable. It didn't offer anything revolutionary and was basically Debian/Ubuntu with a few extra features that no one cared about. Can someone please enlighten me on how Linspire was ever a force in the market?

    • Re:Ummm... (Score:5, Funny)

      by ari_j (90255) on Friday October 03 2008, @04:20PM (#25251137)
      It doesn't matter - if it was bought out, the shareholders are entitled to value for their shares, no matter how little that might be. Wouldn't you be pissed off if you held a couple thousand shares and got deprived of your $1.25?

    • Re: (Score:3, Insightful)

      by Vectronic (1221470)

      I don't think Linspire was every really profitable, nor was it ever a "force in the market" this is just about a couple shareholders wondering where the money they thought they were going to get...went...

      • I do remember seeing Linspire CDs for sale at Fry's right next to the OEM Windows CDs. All the other linux distros were stuck it the linux section, far far away. Walmart sold Linspire systems as well. So some effective attempt at marketing it and getting product placement was made. Doesn't rule out embezzlement, but I think a good effort was made by the company to challenge the MS juggernaut. If I were a shareholder I would strongly question a lack of profit.

    • I fail to see how Linspire was ever profitable. It didn't offer anything revolutionary and was basically Debian/Ubuntu with a few extra features that no one cared about. Can someone please enlighten me on how Linspire was ever a force in the market?

      I believe they made their money with OEMs and retail stores that were stupid enough to by their products and attempt to resell them.

    • Re: (Score:3, Informative)

      by whoever57 (658626)

      I fail to see how Linspire was ever profitable.

      Didn't Linspire get $20M from Microsoft for changing its name from Lindows?

    • Re:Ummm... (Score:5, Informative)

      by AKAImBatman (238306) * <(akaimbatman) (at) (gmail.com)> on Friday October 03 2008, @04:27PM (#25251205) Homepage Journal

      As I recall, Walmart shipped Linspire as the OEM OS for a while. Deals like that tend to infuse quite a bit of cash into a small company like Linspire. Michael Roberts might have you believe that they had hundreds of engineers pouring their souls into improving Windows compatibility, but that's most likely Roberts being Roberts. (Which is to say an extreme exaggerator at best, an outright liar at worst.) Their actual burn rate doesn't sound like it was all that high based on the descriptions of the company.

      • Re: (Score:1, Interesting)

        by Anonymous Coward

        I had some friends working at Xandros at the time. What heard was the Linspire sub-contracted all that work out to Xandros. So I don't think they had that many people working on it in house. I do know that the Xandros people did a fair bit of work, but I'm not 100% sure how much was free software and how much was proprietary.

        It's interesting the Xandros ended up buying Linspire and the Linspire investors ended up with no money. Seems a bit fishy to me...

    • Click N Run (Score:5, Insightful)

      by HalAtWork (926717) on Friday October 03 2008, @04:44PM (#25251349)
      Click N Run was one aspect responsible for their fame. They would take the care to improve and provide pre-configured desktop software in an interface that made it easy to install the software. This was before Synaptic Package Manager was able to do the same thing. Also, before they were called "Linspire", they had the controversial name "Lindows", which connoted that they were trying to provide a Linux desktop that would do things most typical Windows users wanted. A lot of users tried to switch to Linux many times but were frustrated by the experience, so this really had the power to draw a lot of people in. I think that Ubuntu and Fedora succeeded where Linspire failed though.
    • Well there's their Walmart deal, I believe they also got some money out of Microsoft as well.

    • "It didn't offer anything revolutionary and was basically Debian/Ubuntu with a few extra features that no one cared about"

      Isn't there a similiar relationship between Linux and UNIX?

    • ``I fail to see how Linspire was ever profitable. It didn't offer anything revolutionary and was basically Debian/Ubuntu with a few extra features that no one cared about.''

      A lot of businesses profit by selling what someone else already does better for free.

    • Re: (Score:2, Interesting)

      by schotty (519567)

      Although mostly true, as a former user, I can say the presentation + CNR was what made it a hit with the userbase.

      CNR was the icing on the cake -- the package cake. Red Hat and Novell never had that. Now Canonical has something like it bundled with Ubuntu, as does Fedora with their own. Plus it was one of the cleaner KDE based desktops I have ever used. Coming from a diehard GNOME/Fluxbox guy -- that should be taken as some praise.

      The only issue I saw with the distro was a lack of updates to the kernel.

  • I worked for Robertson (Score:3, Insightful)

    by Anonymous Coward on Friday October 03 2008, @04:26PM (#25251201)

    And this doesn't surprise me. He is a pretty shady character. He was the typical, ego-crazed rich guy who loved pushing everyone else around.

    Ever since he tried to defend running as root, I never trusted the guy.

    • Re: (Score:2, Funny)

      by Anonymous Coward

      Ever since he tried to defend running as root

      Well, how do you expect him to empty your bank accounts if you don't let him in through the back-end?

    • Re:I worked for Robertson (Score:4, Interesting)

      by Anonymous Coward on Friday October 03 2008, @11:08PM (#25253735)

      I worked for Michael Robertson at MP3.com. I was there pre-IPO. MP3.com was a wonderful place to work. My favorite gig ever. But dealing with Michael was the least pleasing aspect of the whole thing. He was incredibly arrogant, rude, and obnoxious.

      I'll never forget how he treated this intern kid who was somebody's personal assistant or something. He said he was looking for some big meeting or something. I knew there was a meeting going on in the main conference room so I pointed him that way and followed him there to make sure he found it. He went in to the meeting presumably already in progress and said "I'm so and so's assistant here for such and such meeting" and Michael said "No you aren't, get out!" The poor dude was crushed and I felt bad for having steered him into Michael's venom.

      I did ok financially out of MP3.com having sold the first quarter of my options as soon as they vested (the rest weren't worth much though) so I don't hold any grudge over money (although I know plenty who do and feel like Lindows and other ill-conceived ventures were funded using THEIR money after he cratered their stock options) I just feel bad for how he treated people.

      I once heard one of the tech guys complaining about how Michael loved to say "If I gave you a million dollars could you make this work?!?!" And of course they did because they were rock stars and of course he didn't because he was a bastard.

      Of course, Kevin Carmony was a douche and a half as well and I'm not surprised he had problems at Lindows. He definitely doesn't really get the Free Software thing or he never would have had anything to do with it. They were both trying to take advantage of the "suckers" who give their work away for free.

      Posting anonymously because lots of ex-mp3'ers read /. and I still have to work in this town.

  • Michael Robertson makes Charles Ponzi look legit. Investing in a Robertson start-up is moronic. You would get a better return if you had put $200K in an IndyMac savings account.

    • No joke. Being from San Diego myself, there's no way I would work for, nor invest in, a Robertson-headed company. Back in the day, my brother interviewed at MP3.com after graduating from UCSD, when MP3.com was still a hot property. It was his good fortune that another company made him an offer first, and he took it. Not to say that Robertson's vision of one way digital music ought to work was necessarily a bad one, but he himself doesn't strike me as being all that capable of successfully implementing a vis

  • Every project this guy has touched has turned to shit.

    • For the /. record, what other projects should we be aware of?

      Curious,

      • Robertson was behind the original mp3.com, founded in 1997, which had an immense amount of independent music for free on it. I miss that site. He screwed it up in 2000 with my.mp3.com, a service in which users could register their CD collection and then stream it from the mp3.com servers from mp3s the site itself had ripped and stored. They were financially eviscerated via lawsuits and sold off to Vivendi Universal in 2001. Vivendi just couldn't make it work and dismantled the site entirely. The whole colle

  • Assets going lower now... going lower now... how loooow can they go?

    First you do the steal and run
    Embezzlement is so fun!
    Lots of money in my house
    Keep it quiet, don't tell the spouse!

    Kevin Carmony, stupid hick!
    Wants the cash back, what a dick!
    All around the Lindows clock!
    Hey let's do the Lindows rock! [kevincarmony.com]

  • Time to start back-dating invoices and generating fake receipts. Not that he would actually be able to do that...I mean you would have to know people who were experts in computer....oh wait.

  • Former Fan (Score:3, Interesting)

    by minus-sign (1371393) on Friday October 03 2008, @08:24PM (#25252959)
    I actually liked Linspire. The idea was simple and could have been very profitable: a Linux based OS that was professionally supported. You pay for patches and updates and know it retains support because, well, you pay for it. It didn't work out that way, but the theory was sound. Sorry to see its gone so very very bad.

    • I don't like Linspire, which I got preinstalled on a PC, so much as I liked the idea behind CNR [cnr.com], Click N Run. I got it more than 2 years ago yet CNR hasn't done much since. They were supposed to create clients for other Linux distros but all they have now is Ubuntu and one other.

      Falcon

    • Re:LNL (Score:4, Informative)

      by Gavagai80 (1275204) on Friday October 03 2008, @04:40PM (#25251325)
      Uh, Linspire was as much linux as any other distro. It was KDE with all the usual programs, though most of them renamed. It included proprietary codecs and a commercial dvd player, but was 99% open source and had a 100% open source derivative freespire.

    • They were trying to make money off of being "not MS and not Linux, either".

      How do they explain it "not selling"?

    • Um, well then its Linux. Linux is just a kernel, nothing more, if it has the Linux kernel, its Linux. Now I think maybe you meant its not GNU/Linux or something along that lines of that perhaps.

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