Geeknet

Geeknet, Inc.
FormerlyVA Research (1993–1999)
VA Linux Systems
(1999–2001)
VA Software (2001–2007)
SourceForge (2007–2009)
Company typeSubsidiary
IndustryOnline media
Retail
FoundedNovember 1993; 31 years ago (1993-11)[1]
FounderLarry Augustin[2] & James Vera (VA Research)
Headquarters
Fairfax County, Virginia
Key people
Kathryn McCarthy (CEO)
ParentGameStop (2015–present)

Geeknet, Inc. is an American company that is a subsidiary of GameStop based in Fairfax County, Virginia.[3] The company was formerly known as VA Research, VA Linux Systems, VA Software, and SourceForge, Inc.[1]

History

VA Research

VA Research was founded in November 1993[1] by Stanford University graduate student Larry Augustin and James Vera. Augustin was a Stanford colleague of Jerry Yang and David Filo, the founders of Yahoo!.[4] VA Research started to build and sell personal computer systems installed with the Linux operating system, as an alternative to more expensive Unix workstations that were available at the time.[5] During its initial years of operation, the business was profitable and grew quickly, with over $100 million in sales and a 10% profit margin in 1998. It was the vendor of pre-installed Linux computers, with approximately 20% of the Linux hardware market.[5]

In October 1998, the company received investments of $5.4 million from Intel and Sequoia Capital.[6]

VA Linux servers

In March and April 1999, VA Research purchased Enlightenment Solutions, marketing company Electric Lichen L.L.C., and VA's top competitor, Linux Hardware Solutions.[5] That year, VA Research also won a business-plan competition for the right to operate the linux.com domain.[4] In May 1999, VA created a Linux Labs division, hiring former linux.com domain holder and programmer Fred van Kempen, and programmers Jon "maddog" Hall, Geoff "Mandrake" Harrison, Jeremy Allison, Richard Morrell (who would later create Smoothwall as a project at VA Linux) and San "nettwerk" Mehat.[4] In the summer of 1999, programmers Tony Guntharp, Uriah Welcome, Tim Perdue and Drew Streib began designing and developing SourceForge. SourceForge was released to the public at Comdex on November 17, 1999. VA began porting Linux to the new IA-64 processor architecture in earnest. Intel and Sequoia, along with Silicon Graphics and other investors, added an additional $25 million investment in June 1999.[6]

Initial public offering

LNUX stock price (9 December 1999 through 9 December 2000)

The company's customers included Akamai Technologies and eToys.[7]

The company changed its name to VA Linux Systems. On December 9, 1999, the company became a public company via an initial public offering. The company raised $132 million, offering shares at $30/share, but the shares opened for trading at $299/share, before closing at $239.25/share, or 698% above the IPO price, breaking a record for the largest first day gain.[8][9][10][11][12] Larry Augustin, the 38-year old founder and chief executive officer of the company, became a billionaire on paper and a 26-year old web developer at the company said she was worth $10 million on paper.[2] By August 2000, the shares were trading at $40 each[2] and only 24 mutual funds held the stock.[13] On December 8, 2000, one year later, after the bursting of the dot com bubble, shares traded at $8.49/share.[14] In January 2001, the stock traded at $7.13/share.[2] By December 2002, it was worth just $1.19/share.[9]

Acquisition of Andover.net

On February 3, 2000, the company announced that it was acquiring Andover.net for $800 million, a month after it became a public company.[15][16][17] This acquisition gave VA Linux popular online media properties such as Slashdot, Andover News Network, Freshmeat, NewsForge (became a mirror of linux.com in 2007, mirrors geeknet.com since 2010), linux.com, ThinkGeek, and a variety of online software development resources. With this acquisition came a stable of writers such as Rob Malda, Robin Miller (Roblimo), Jack Bryar, Rod Amis, Jon Katz, and "CowboyNeal". The acquisition eventually allowed the company to shift its business model from Linux-based product sales to specialty media and software development support.

Japanese partnership

In September 2000, in partnership with Sumitomo Corporation, the company created a Japanese subsidiary, VA Linux Systems Japan KK, to promote Linux systems in Japan.[18][19]

Sales growth

The company's sales grew to $17.7 million in 1999, up from $5.5 million in fiscal 1998.[20] In fiscal 2000, the company's sales were $120.3 million.[21]

VA Software

By 2001, VA Linux's original equipment and systems business model encountered stiff competition from other hardware vendors, such as Dell, that now offered Linux as a pre-installed operating system.

On June 26, 2001, VA Linux decided that it would leave the systems-hardware business and focus on software development.[22][23] During the summer of 2001, all 153 of the hardware-focused employees were dismissed as a result of this shift in the company's business model.[24][25][26][27]

On December 6, 2001, the company formally changed its name to VA Software, recognizing that the majority of the business was now software development and specialty news and information services.[28] However, the company's Japanese subsidiary still uses the name "VA Linux Systems Japan K.K."

On January 2, 2002, the company's stock price plunged 42% after an earnings warning.[29]

SourceForge and OSDN

SourceForge Inc. logo

In December 2003, VA Software marketed a proprietary SourceForge Enterprise Edition, re-written in Java for offshore outsourcing software development.[30]

By April 2004, the company focused on SourceForge, an online software application, and OSDN, a group of websites catering to people in the information technology and software development industries, which was renamed to Open Source Technology Group (OSTG). At that time, the stock was trading at $1.94/share.[31]

In January 2006, VA Software sold Animation Factory to Jupitermedia Corporation.[32]

On April 24, 2007, the company sold SourceForge Enterprise Edition to CollabNet.[33][34]

On May 24, 2007, VA Software changed its name to SourceForge Inc. and merged with OSTG.[35][36]

On January 5, 2009, Scott Kauffman was appointed president and chief executive officer of SourceForge.[37]

Geeknet

In November 2009, SourceForge, Inc. changed its name to Geeknet, Inc.[38]

Geeknet president and chief executive officer Scott Kauffman resigned on August 4, 2010, and was replaced by executive chairman Kenneth Langone and the company changed its ticker symbol to GKNT.[39]

On August 10, 2010, Jason Baird, the chief operations officer, and Michael Rudolph, the chief marketing officer resigned, both effective 31 August 2010. Jay Seirmarco, the chief technology officer also resigned, effective September 30, 2010.

Effective January 31, 2011, Geeknet appointed Matthew C. Blank, former chief executive officer and chairman of Showtime Networks as a member of its board of directors.[40]

Later in 2011, the company renamed its Freshmeat website to Freecode.[41]

In September 2012, Slashdot, SourceForge, and Freecode were sold to Dice Holdings for $20 million, leaving ThinkGeek as the sole property of Geeknet.[42][43][44]

On May 26, 2015, it was announced that pop culture-oriented retailer Hot Topic had made an offer to acquire Geeknet for $17.50 per-share, valuing the company at $122 million.[45][46][47] However, on May 29, 2015, it was revealed that an unspecified company had made a counter-offer of $20 per-share; Hot Topic was given until June 1, 2015, to exceed this new offer.[48][49] On June 2, 2015, it was announced that video game retail chain GameStop would acquire Geeknet for $140 million, paying $20 per share.[50][51][52] The deal closed on July 17, 2015.[3]

References

  1. ^ a b c "VA Research To Port Linux To Intel's IA-64 Architecture" (Press release). Intel. March 2, 1999.
  2. ^ a b c d Walsh, Diana (January 18, 2001). "VA Linux — Easy Come, Easy Go / Stock's dramatic rise and fall leave determined workers unfazed". San Francisco Chronicle.
  3. ^ a b "GameStop Completes Acquisition of Geeknet" (Press release). Business Wire. July 17, 2015.
  4. ^ a b c Mardesich, Jodi (July 5, 1999). "VA Linux Systems". Fortune.
  5. ^ a b c Malik, Om (May 3, 1999). "Dell plus Sun equals VA Research". Forbes.
  6. ^ a b Shankland, Stephen (August 9, 1999). "VA Linux programs for the future". CNET.
  7. ^ Shankland, Stephen (January 2, 2002). "VA Linux files IPO plans". CNET.
  8. ^ Fisher, Lawrence M. (1999-12-10). "A Tiny Company Without Profits Goes Public With a Bang (Published 1999)". The New York Times. ISSN 0362-4331. Retrieved 2020-11-11.
  9. ^ a b Graham, Benjamin, 1894-1976. (2003). The intelligent investor : a book of practical counsel. Zweig, Jason. (Revised ed.). New York: HarperBusiness Essentials. p. 152. ISBN 0-06-055566-1. OCLC 51942330.{{cite book}}: CS1 maint: multiple names: authors list (link) CS1 maint: numeric names: authors list (link)
  10. ^ Gimen, Mark (December 10, 1999). "Dissecting the VA Linux IPO". Salon.
  11. ^ "VA Linux rockets on debut". CNN. December 9, 1999.
  12. ^ Ewing, Terzah; Gomes, Lee; Gasparino, Charles (December 10, 1999). "VA Linux Registers A 698% Price Pop". The Wall Street Journal.
  13. ^ HAKIM, DANNY (August 20, 2000). "Investing; Why Few Funds Are Lining Up To Buy Linux". The New York Times.
  14. ^ Walker (December 10, 2009). "10 years gone: The VA Linux Systems IPO". CNET.
  15. ^ Gomes, Lee (February 4, 2000). "VA Linux Systems Agrees to Buy Andover.net in $900 Million Deal". The Wall Street Journal.
  16. ^ Gray, Douglas F. (February 4, 2000). "VA Linux Buys Andover.Net". Computerworld.
  17. ^ "VA Linux buying Andover". CNN. February 3, 2000.
  18. ^ Weiss, Todd R. (September 26, 2000). "VA Linux teams with its first Japanese subsidiary and partnerships". Computerworld.
  19. ^ Shankland, Stephen (January 3, 2002). "VA Linux trying to make inroads into Japan". CNET.
  20. ^ DiCarlo, Lisa (August 14, 2000). "VA Linux Builds Software To Order". Forbes.
  21. ^ "VA Linux beats the Street". CNN. August 23, 2000.
  22. ^ Orlowski, Andrew (October 31, 2001). "VA drops Linux name, boots out Kuro5hin". The Register.
  23. ^ "VA Linux Outlines New Strategic Focus on Software" (Press release). Business Insider. June 26, 2001.
  24. ^ Singer, Michael (June 27, 2001). "VA Linux Drops Hardware Division". QuinStreet.
  25. ^ Schiffman, Betsy (June 28, 2001). "VA Linux Gives Up The Hard Stuff". Forbes.
  26. ^ Orlowski, Andrew (June 29, 2001). "VA Linux quits hardware ahead of PC bloodbath". The Register.
  27. ^ Shankland, Stephen (January 2, 2002). "VVA Linux leaves hardware, lays off workers". CNET.
  28. ^ "VA Linux Now VA Software". Slashdot. December 7, 2001.
  29. ^ "VA Linux stock tumbles on earnings warning". CNET. January 2, 2002.
  30. ^ "Latest Product from VA Software Provides Better Governance for Offshore Outsourcing" (Press release). Business Wire. December 8, 2003.
  31. ^ "VA SOFTWARE CORPORATION PROSPECTUS VA SOFTWARE CORPORATION". NASDAQ.
  32. ^ "Jupitermedia's JupiterImages Division Announces Acquisition of Animation Factory" (Press release). Business Wire. December 27, 2005.
  33. ^ Taft, Darryl K. (April 24, 2007). "CollabNet Acquires SourceForge". EWeek.
  34. ^ "CollabNet® Releases SourceForge® Enterprise Edition 4.4" (Press release). Business Wire. July 31, 2007.
  35. ^ Eric (May 24, 2007). "VA Linux Changes Name To SourceForge; FY Q3 Revs Come Up Short". Barron's.
  36. ^ Montalbano, Elizabeth (May 24, 2007). "VA Software drops software, becomes Sourceforge Inc". International Data Group.
  37. ^ Brohan, Mark (December 29, 2008). "Scott Kauffman is the new president and CEO at SourceForge". Digital Commerce 360.
  38. ^ "SourceForge becomes Geeknet". American City Business Journals. November 4, 2009.
  39. ^ "Geeknet Announces Second Quarter Financial Results and Departure of President and CEO Scott Kauffman" (Press release). Globe Newswire. August 4, 2010.
  40. ^ "Geeknet Appoints Matthew C. Blank To Its Board Of Directors" (Press release). TheStreet.com. February 1, 2011.
  41. ^ "What's in a name?". Freecode.
  42. ^ D'Orazio, Dante (September 18, 2012). "Slashdot, SourceForge, and Freecode purchased by career website company Dice for $20 million". The Verge.
  43. ^ Lunden, Ingrid (September 18, 2012). "Dice Holdings Pays $20M Cash For Slashdot, SourceForge And Freecode From Geeknet". TechCrunch.
  44. ^ McAllister, Neil (September 19, 2012). "Dice swallows Slashdot, SourceForge, Freecode in $20m deal". The Register.
  45. ^ "Hot Topic to Acquire Geeknet, Inc., Parent Company of Online Retailer ThinkGeek" (Press release). PR Newswire. May 26, 2015.
  46. ^ HUTCHINSON, LEE (May 26, 2015). "Hot Topic enters agreement to buy ThinkGeek parent company Geeknet Inc". Ars Technica.
  47. ^ Dulaney, Chelsey (May 26, 2015). "Hot Topic to Buy Retailer Geeknet Inc". The Wall Street Journal.
  48. ^ Rupp, Lindsey (May 29, 2015). "Geeknet Gives Hot Topic Three Days to Match Higher Offer". Bloomberg L.P.
  49. ^ Beilfuss, Lisa (May 29, 2015). "Geeknet Calls New Takeover Offer Superior to Hot Topic's Bid". The Wall Street Journal.
  50. ^ HUTCHINSON, LEE (June 2, 2015). "GameStop outbids Hot Topic for ThinkGeek parent company purchase". Ars Technica.
  51. ^ Stynes, Tess (June 2, 2015). "GameStop Agrees to Acquire Geeknet, Trumping Hot Topic". The Wall Street Journal.
  52. ^ "Geeknet Ends Deal With Hot Topic, Takes GameStop Offer". NBC 5 Dallas-Fort Worth. Retrieved 2020-03-06.