Shares rose 7.6 percent after hours to $55.30 as earnings and revenue beat estimates and the company unveiled a $300 million buyback program. The stock reached its 10-year high on Tuesday at $54.01, and as of Wednesday’s close was up 24 percent so far in 2012.

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Mark Zuckerberg, CEO, Facebook:

The internet is the most powerful tool we have for creating a more open and connected world. We can’t let poorly thought out laws get in the way of the internet’s development. Facebook opposes SOPA and PIPA, and we will continue to oppose any laws that will hurt the internet.

The world today needs political leaders who are pro-internet. We have been working with many of these folks for months on better alternatives to these current proposals. I encourage you to learn more about these issues and tell your congressmen that you want them to be pro-internet.

Sen. Ron Wyden (D., Ore.):

The Internet has become an integral part of everyday life precisely because it has been an open-to-all land of opportunity where entrepreneurs, thinkers and innovators are free to try, fail and then try again. The Internet has changed the way we communicate with each other, the way we learn about the world and the way we conduct business. It has done this by eliminating the tollgates, middle men, and other barriers to entry that have so often predetermined winners and losers in the marketplace. It has created a world where ideas, products and creative expression have an opportunity regardless of who offers them or where they originate.

Protect IP (PIPA) and the Stop Online Piracy Act (SOPA) are a step towards a different kind of Internet. They are a step towards an Internet in which those with money and lawyers and access to power have a greater voice than those who don’t. They are a step towards an Internet in which online innovators need lawyers as much or more than they need good ideas. And they are a step towards a world in which Americans have less of a voice to argue for a free and open Internet around the world.

Legal Team, Red Hat Software:

In a single generation, the Internet has transformed our world to such an extent that it is easy to forget its miraculous properties and take it for granted. It’s worth reminding ourselves, though, that our future economic growth depends on our ability to use the Internet to share new ideas and technology. Measures that block the freedom and openness of the Internet also hinder innovation. That poses a threat to the future success of Red Hat and other innovative companies.

The sponsors of SOPA and PIPA claim that the bills are intended to thwart web piracy. Yet, the bills overreach, and could put a website out of business after a single complaint. Web sites would vanish, and have little recourse, if they were suspected of infringing copyrights or trademarks.

The good news is that there is growing opposition from many quarters to these bills. Just this past weekend, the White House expressed serious concerns, opposing legislation — like SOPA and PIPA — that “reduces freedom of expression, increases cybersecurity risk, or undermines the dynamic, innovative global Internet.

Lanham Napier, CEO, Rackspace:

In my last blog post on SOPA and PIPA, I explained why Rackspace — along with much of the Internet community — opposes these bills in their current form. They are well-intentioned, but would do more harm than good. Their enforcement provisions could be easily evaded, and they would undermine the security and stability of the Internet.

Since then, I and other Rackers have been working with key lawmakers to fix the bills so that they will (a) actually be effective in fighting online piracy, and (b) avoid disrupting the Internet or imposing unreasonable costs on Internet users and service providers.

We at Rackspace are on the front lines of the battle against copyright infringers and other online criminals. We employ dedicated teams that take enforcement actions under the Digital Millennium Copyright Act as well as our own strict Acceptable Use Policy every day. We agree that better tools are needed for this fight but SOPA and PIPA do not fit the bill.

Gary Shapiro, President and CEO, Consumer Electronics Association:

“It is increasingly clear that bills causing collateral damage to innovation in the guise of fighting piracy are not politically viable. Now that unreasonable solutions to piracy have been shown not to work, it is time to explore reasonable ones. We urge policymakers to join CEA in support of the OPEN Act — a bicameral, bipartisan and narrowly targeted approach to fighting foreign “rogue websites.”

Paul Hortenstine, Motion Picture Association of America, which supports the bills:

The legislation targets criminals: foreign thieves who profit from pirated content and counterfeit goods. These foreign rogue websites are operating freely today while legitimate American businesses are opposing legislation that would block these criminal websites from the American market.

The Pirate Bay, a site that links visitors to pirated content and would arguably fit someone’s definition of “foreign rogue Web site”:

SOPA can’t do anything to stop TPB. Worst case we’ll change top level domain from our current .org to one of the hundreds of other names that we already also use. In countries where TPB is blocked, China and Saudi Arabia springs to mind, they block hundreds of our domain names. And did it work? Not really.

To fix the “problem of piracy” one should go to the source of the problem. The entertainment industry say they’re creating “culture” but what they really do is stuff like selling overpriced plushy dolls and making 11 year old girls become anorexic. Either from working in the factories that creates the dolls for basically no salary or by watching movies and tv shows that make them think that they’re fat.

Ben Greenman, Contributor, The New Yorker:

Dear Spanish speakers, I was only joking when I said you think we’re all protesting soup. Geez: People are so touchy on blackout days

January 18, 2012 8:44 am via webReplyRetweetFavorite

@bengreenman

Ben Greenman

And though the immediate question over whether or not HP would ultimately keep the platform or sell it to someone else is now answered, it was clear from talking with Whitman and Andreessen that there are still a lot of issues to sort out. There are questions about business models, how to work with outside developers, hardware manufacturers, and even over how many people will keep their jobs.

It’s also notable that Andreessen was on hand because of his history with open source projects. As the creator of the Netscape Web browser, Andreessen was there for that company’s much-remembered IPO, its acquisition by AOL, and the transformation of the Netscape browser into an open source project now called Mozilla, which produces the popular browser Firefox.

My first question was about what kind of contribution — both financial and otherwise — HP is prepared to make to this new open source project.

AllThingsD: Meg, do you have any thoughts on how much you’re going to contribute to this webOS effort in terms of money and people at this point?

Whitman: I won’t give you a dollar number but I will tell you that it will be a substantial software investment but it will not break the bank at HP. This is a wonderful asset, actually, but what I was telling employees this morning is you’re a start-up now. You’re a start-up with a number of people, 750,000 installed devices out there, and with your first venture capitalist, and that’s HP. And let’s go figure out how to change the world out there.

The thought that it’s now a start-up makes me want to turn to you, Marc, and ask, what do you think of that?

Andreessen: I’ve been lucky enough to have been involved in a number of what I think have turned out to be very successful open sourcing projects that are a lot like this. And of course the big one that I was in the middle of was the transition from Netscape to Mozilla, which is not a perfect analogy but there are a lot of similarities and that just turned out marvelously well. And then obviously Linux has been a huge transformative force in the industry in the last 10 years, and both Linux as an open source project and Red Hat as a business have been spectacular. So we live in a world now where open source now, unlike 10 or 15 years ago, is mainstream, it’s widely accepted, it’s widely adopted, it’s trusted, enterprises are willing to bet on it, hardware companies are willing to bet on it, and chip companies build it into their plants from day one. So I think we have a real opportunity to have something really special happen.

Meg, in looking back to before your time as CEO when there was a plan to have webOS on printers and all the consumer PCs. Will there be any changes to those plans?

Whitman: I think we’ve got to walk before we run here. And let’s see what form webOS takes. In 2012 as you know we’re bringing two Windows 8 tablets to the market, we’re excited about that, we’re going to be working with them [Microsoft] constructively, but there may be an opportunity in 2013 to think of a different device, maybe come back to tablets. Let’s just see how it goes, but obviously HP would be one of the likely suspect hardware manufacturers for webOS.

So you’re not closing the door entirely to hardware down the road, just not right away?

Whitman: In all likelihood, not in 2012. The 2012 road map is already done.

One thing that comes to mind is that, based on our reporting, there may be headcount reductions in webOS at some point. Can you give us any clarity on that?

Whitman: I can’t. We have released no numbers on that and the reason is we don’t know. I’d tell you if I knew, but we don’t know. We’ve got to get a business plan, a product road map, a business model that we think will work, and decide how we’re going to engage with other hardware manufacturers, how we’re going to engage the open source community and that will determine ultimately the types and numbers of people.

The order is said to coincide with the forthcoming release of a new product that Isilon is expected to announce next week.

So huge an order for data storage would coincide with the construction of Apple’s huge data center in Maiden, N.C., and that’s expected to be the hub for a new version of iTunes that relies more on storing media in the cloud and less on using its customers local hard drives.

If you have trouble getting your head around the petabyte, the fine folks at another EMC unit, the backup service Mozy (soon to be a unit of VMWare) produced this fascinating graphic. As they tell it, one petabyte is enough to store more than 13.3 years worth of HD video, meaning 12 petabytes would be enough to store nearly 160 years worth.

The scale of the storage infrastructure, if true, would amount to another potentially intriguing clue to the environment Apple is using inside its data center. Previously it had disclosed in job ads on its Web site that its hardware there will include a mix of systems running Mac OS X, IBM’s AIX, Oracle’s Sun/Solaris, and some Red Hat Linux-based machines.

PREVIOUSLY:

• Apple’s Area 51: The Truth Is Out There
• Apple’s N.C. Data Center Intended for iTunes, MobileMe
• Apple Owns Another 70 Acres Near NC Data Center
• Was Apple Planning on Doubling Its North Carolina Data Center All Along?
• Apple Reaching for the Cloud With MacBook Air and N.C. Data Center
• That’s Apple’s New Data Center? Where’s the Giant Glass Cube?

To date, much of Red Hat’s success has come because the software is relatively inexpensive, Unix applications port easily to Linux, and because Red Hat is not Microsoft i.e. they are not a large, integrated vendor that can lure customers in with low pricing but exploit their pricing power once the customer becomes dependent on the software. Most customers view Red Hat Enterprise Linux as a way to break free of large vendor lock in and the high economic toll it extracts.

However, with Oracle buying Sun, Red Hat now has two giant competitors, both of whom have virtually unlimited pricing power. We believe it will be increasingly difficult for Red Hat to compete over a sustained period as a small, standalone, independent vendor against the upcoming entry of Oracle, who could offer cheap hardware/software bundles, steep discounts to stay on or migrate to Open Solaris, or even pay customers to not use RHEL as they seek to stabilize the Solaris maintenance stream. Therefore, with Red Hat’s choice-based value proposition potentially pre-empted by a data center land grab among 2 giants, it seems to us that Red Hat needs a partner. A large partner. Someone with pricing power, C-level relationships, and a significant enough presence in the data center to combat the Oracle/Microsoft threat. IBM fits the bill.

So, caught between Oracle (ORCL) and Microsoft (MSFT), Red Hat (RHT) rushes into the waiting arms of IBM (IBM). Makes sense I Suppose, as Barron’s recently argued–though with a caveat: Unlike Sun (JAVA), which was fast slipping into the mud when Oracle acquired it, Red Hat is doing quite well for itself. And that could make it prohibitively expensive.

Research firm Wedge Partners today took a look at the potential targets and came up with plenty of candidates. They think the company is going to enter a more active acquisition period, with most of the focus on smaller venture-backed companies, but adds that they could do “a handful of acquisitions” in the $100 million to $500 million range. And maybe a bigger deal or two. In particular, they see Oracle targeting deals in Software as a Service, virtualization and health-care technology.

Here’s Wedge’s list of potential targets in each of the three sectors:
Software as a Service:

Salesforce.com (CRM): Wedge notes that Ellison was an early investor and still holds his position; CEO Marc Benioff is a former Oracle exec. Wedge contends that “despite the bluster from both companies,” they rarely compete. They assert that Oracle’s SaaS offering is “greatly inferior” to CRM’s.

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On its post-earnings conference call, the company said it expects revenue for the quarter of $169 million to $171 million, and non-GAAP profits of 16-17 cents a share. The Street has been looking for $172.4 million and 18 cents.

Asked on the call whether Red Hat is still backing its previous full year guidance, CFO Charlie Peters appeared to back away from the company’s most recent forecast. “We are basically taking, I’d say, each quarter at a time” due to “volatile” interest rates and exchange rates, he said.

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Red Hat (RHT) this morning announced an agreement to acquire Qumranet, an Israeli company that provides a virtualization software platform, for $107 million in cash.

Qumranet’s Web site says that “organizations use Qumranet’s first product, Solid ICE, to host Windows and Linux desktops centrally on servers in the data center.” Investors in the company included Sequoia Capital and Norwest Venture Partners.

The company said the acquisition will not materially increase revenue in the Feb. 2009 fiscal year, but should add “up to $20 million” in revenue in fiscal 2010. Red Hat said the deal is expected to be dilutive to 2009 GAAP EPS by 5-6 cents a share, and to cash flow from operations by 3-4 cents.

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The desktop has become a lot like teenage sex: A lot of people are talking about it but not many people are doing it.”

–Matthew J. Szulik, Red Hat CEO, October, 2005

I’d argue that a worldwide monopoly, enforced by business practices that a federal judge has found to be predatory and anticompetitive, probably has more to do with killing innovation than anything the open source movement could ever do.”

–Szulik on Microsoft’s 2001 claim that Linux “stifled innovation”

Matthew Szulik, Red Hat’s wisecracking chief executive officer, is stepping down after nearly a decade on the job. He’ll remain with the company as chairman of the board, but Jim Whitehurst, a former Delta chief operating officer (yes, an airline exec), will take on the CEO role.

Szulik, who’s been with Red Hat since just a few months after its IPO in 1999, said he’s giving up the CEO job because of a family crisis. “For many months, my family has been challenged by serious health issues,” Szulik said during a conference call to discuss the company’s strong third-quarter financial results. “It became clear to me that I needed to direct the same level of attention and effort in support of my family at this time that I have invested in Red Hat for nearly a decade.”

And hopefully–no, presumably–that will be enough to resolve whatever crisis it is that Szulik faces (and all of us here at D wish you the best, Matthew). Under his stewardship, Red Hat reported yesterday that third-quarter profit surged 39% from a year ago, to $20.3 million. Revenue rose 28% to $135.4 million.

“For many years, my face has been pressed up against the windshield trying to look into the future,” Szulik wrote in a farewell posted to the Red Hat blog. “Learning and adapting to an evolving Red Hat community, culture and marketplace. Red Hat associates past and present, along with members of the open source community and our customers and partners, picked up their brushes, dipped them into a paint palette of color to create this artwork called Red Hat. I take pride when customers and industry types comment to me that the people of Red Hat are ‘different.’ Not like the cylons who have come to dominate the industry of technology. Through our actions, the open source community and the people of Red Hat are defining a modern economic relationship between developer and customer. Collaboration. Transparency and value delivered. Our customers and marketplace are responding as evidenced by our financials and strong market potential. What was once considered a joke in 1998 no longer is. Today governments and industry are responding to the values and practices of open source as evidenced by their support of OLPC [One Laptop Per Child] and the broad open source education initiatives in India, South America and parts of Africa.”

Such anti-Linux declarations being biannual, it’s clear we were about due for another one, which Ballmer dutifully provided last week at a company event in the United Kingdom.

… Our battle is not sort of business model to business model. Our battle is product to product, Windows versus Linux, Office versus OpenOffice.
The only other thing I would say that is probably germane is, we spend a lot of money, the rest of the commercial industry spends a lot of money on R&D. We’ve spent a lot of money licensing patents, when people come to us and say, ‘Hey, this commercial piece of software violates our patent, our intellectual property,’ we’ll either get a court judgment or we’ll pay a big check. And we are going to–I think it is important that the open-source products also have an obligation to participate in the same way in the intellectual property regime.

“That’s why we’ve done the deal we have with Novell, where not only are we working on technical interoperability between Linux and Windows, but we’ve also made sure that we could provide the appropriate, for the appropriate fee, Novell customers to also get essentially the right to use our patented intellectual property. And I think it’s great the way Novell stepped up to kind of say intellectual property matters. People who use Red Hat, at least with respect to our intellectual property, in a sense have an obligation to eventually compensate us.”

So according to Ballmer, if you’re a Red Hat customer you may have an “undisclosed balance-sheet liability” to deal with in the near future. And if you’re not, you probably want to stay away from free software entirely. Because, as Groklaw’s Pamela Jones suggests, Microsoft apparently plans to eradicate it.

Ballmer “has just clearly outlined how Microsoft intends to extinguish Linux as we know it,” Jones writes. “Microsoft knows full well that in any intellectual-property regime based on software patents, particularly when used as weapons against innovation to protect and reward the old, no one can compete with Microsoft. They have all the money. FOSS is written by individuals who don’t have a pile of gold under the bed to go to court and get a court judgment or pay ‘a big check.’ Ballmer of course knows that. So this is the anticompetitive plan, under the guise of everyone having to play by the same rules.”

Anyway, the move will likely be viewed with some distaste by the Linux community, which has denounced the Novell-Microsoft deal as a sort of Hitler-Stalin alliance against Oracle and Red Hat or, worse, as undermining the open-source movement by pitting one Linux distributor–Novell–against the rest of the Linux community.