BSD Suppliers Unite to Deliver the World's Most Popular Internet Operating Systems.

Business Editors/Technology Writers

COLORADO SPRINGS, Colo.--(BUSINESS WIRE)--March 9, 2000

The New BSDI To Deliver Renowned BSD Operating System Technologies And

Back The Rapidly Growing FreeBSD Open Source Community

Berkeley Software Design, Inc. (BSDI) announced today that it has merged with Walnut Creek CDROM, the distributor of the popular FreeBSD operating system. As a merged company, the new BSDI unites the leading developers and suppliers of the Berkeley Software Distribution operating system. BSDI will develop and deliver advanced BSD(R) Internet operating systems and platforms, while providing the open source FreeBSD Project with technology, backing and expanded support.

BSD operating systems run some of the Internet's most highly trafficked sites and largest service providers, including Yahoo!(R), Microsoft's Hotmail and UUNET, an MCI WorldCom company. BSD and Linux are today's fastest-growing operating systems, according to Survey.com, the leading eResearch company.

BSD operating system, networking and Internet technologies have achieved widespread acceptance in the Internet infrastructure. Over 100,000 commercial Internet customers run BSD operating systems on more than 2,000,000 BSD-powered servers. It is estimated that nine out of 10 Internet Service Providers (ISPs) and Network Service Providers (NSPs) as well as 15 percent of all Internet sites run BSD systems. BSD operating systems are also embedded in innovative Internet appliances from Intel, IBM, Lucent, F5 Labs, Hitachi and many others.

BSDI also announced that Yahoo! Inc. (NASDAQ:YHOO) will take an equity interest in the new company. BSDI will leverage the equity interest to execute on its plan to build a bridge between open source innovation and commercial requirements. The equity position will be used to grow BSDI's presence as a leading provider of the most advanced Internet operating systems for the Internet infrastructure.

BSDI intends to form a united front for the BSD operating systems. The company will deliver, support and enhance both BSD/OS and FreeBSD. BSDI and the FreeBSD Project are jointly evaluating the technology and market requirements for merging parts of the code bases for the two operating systems.

The New BSDI's Leadership

"BSD technologies have evolved from a long history of advanced computing at the core of the Internet," said Dr. Marshall Kirk McKusick, BSDI's chairman of the board. "The new BSDI will further enrich the popular BSD computing platform, which is already widely deployed throughout the world." McKusick was a founding member of the University of California at Berkeley's Computer Systems Research Group (CSRG) and is widely acknowledged as a key early contributor to the open source movement.

To drive the new BSDI's vision, roadmap and continued profitable growth, Gary J. Johnson has been appointed chief executive officer. Johnson is an experienced technology executive who has served in a variety of senior management, sales, marketing and operations capacities with leading Silicon Valley companies including Tandem Computers (Compaq), Convergent Technologies (Unisys) and SCO. Johnson most recently served as president of ClickService Software, a leading provider of e-commerce, customer relationship management (CRM) software.

"Innovation in the operating systems arena relies heavily on work in the open source community," said Johnson. "To date, Linux suppliers, such as Red Hat Software (NASDAQ: RHAT) and VA Linux (NASDAQ: LNUX), have captured impressive attention for the open source approach to development. At the core of the Internet, however, BSD technologies are pervasive. The new BSDI will be working closely with the open source community to ensure that advanced BSD Internet operating systems and platforms continue to meet the ever-increasing demands for Internet servers, applications, appliances and other elements vital to the Internet infrastructure."

In addition to his current responsibilities, Mike Karels, BSDI's vice president of engineering and the former chief system architect and principal programmer for the University of California at Berkeley's CSRG, plans to join the architectural team for the FreeBSD Project. Karels, who replaced Sun Microsystems co-founder Bill Joy at the CSRG, is recognized as one of the world's foremost developers of Unix internals and TCP/IP networking software.

"BSD technologies have contributed to Yahoo!'s continued success by offering the reliability and level of service necessary to ensure the availability and scalability we need to keep Yahoo! up and running around the clock regardless of increasing user demand," said David Filo, co-founder and Chief Yahoo, Yahoo! Inc.

BSDI Continues To Deliver BSD/OS And FreeBSD;

Expands And Accelerates FreeBSD Open Source Initiatives

The new BSDI will sell and support FreeBSD, BSD/OS(tm), BSDI(tm) Internet Super Server and value-added BSD product lines through its worldwide sales channels to Internet infrastructure providers, appliance developers and business users. BSDI will offer commercially supported BSD operating systems and related applications, Internet appliance platforms, technical support and services, open source software development, and consulting services. The company will deliver its BSD Internet and networking technologies on leading microprocessor platforms, including Intel, SPARC, Alpha, PowerPC and StrongARM.

BSDI will continue to develop, enhance and distribute BSD/OS and FreeBSD according to the terms of the business-friendly, unencumbered Berkeley software license, which encourages development for open source software projects, embedded systems, specialized applications, information appliances and other operating system-enabled products.

BSDI will expand and accelerate Walnut Creek CDROM's FreeBSD open source initiatives by sharing BSD/OS technical innovations with the FreeBSD Project and by providing this open source project with operational and technical support, marketing and funding. BSDI will continue to distribute packaged versions of FreeBSD and also plans to develop value-added products based on FreeBSD as well as to provide technical support, consulting services, educational services and training for FreeBSD customers. These steps are expected to promote and invigorate the BSD open source computing movement. The FreeBSD Project develops the popular FreeBSD operating system and aggregates and integrates contributed software from more than 5,000 developers worldwide.

Internet and Open Source Leaders Support The New BSDI

"We are delighted that BSDI is backing the FreeBSD open source community," said Jordan Hubbard, chief evangelist and co-founder of the FreeBSD Project. "The new BSDI has considerable expertise in commercializing, maintaining, distributing and supporting the world's most advanced Internet operating systems. We are excited and greatly looking forward to partnering with BSDI's chief developers, especially Mike Karels and other original members of UC Berkeley's CSRG, to accelerate operating system, networking and Internet innovation."

"Open source operating systems like BSD offer better technology and more choices to the customer," said Eric Raymond, president of the Open Source Initiative. "I expect BSDI to prove yet again that the open source and business communities can ally to do great things together, driving the industry forward as dramatically as the Internet."

"Our research shows that BSD and Linux will increase their share of enterprise servers by between 100 percent and 500 percent over the next two years in the fundamental applications that run U.S. business," said Dave Trowbridge, senior analyst at Survey.com. "This new company will help ensure that BSD gets its place in the sun, which its rich heritage and solid technical foundations deserve."

About the Berkeley Software Distribution Operating System

Berkeley Software Distribution operating system technologies were originally developed from 1979 to 1992 by the Computer Systems Research Group (CSRG) at the University of California at Berkeley. Berkeley-derived operating system and networking technologies are at the heart of most modern Unix and Unix-like operating systems. Today, virtually every major Internet infrastructure provider uses BSD operating systems. BSD operating system technologies are used by leading mission-critical network computing environments and are embedded in Internet appliance platforms that require advanced Internet functionality, reliability and security.

About the FreeBSD Project

FreeBSD is a popular open source operating system developed by the FreeBSD Project and its worldwide team, consisting of more than 5,000 developers funneling their work to 185 "committer" developers. It is available free of charge from ftp.freebsd.org and also distributed as a shrink-wrap software product through CompUSA, Fry's, Borders, Ingram, FreeBSDmall.com and others. FreeBSD includes thousands of ported applications, including the most popular Web, Internet and E-mail applications. FreeBSD is distributed under the Berkeley Software Distribution license, which means that it can be copied and modified freely. For more information about the FreeBSD Project, visit www.freebsd.org.

About Walnut Creek CDROM

Walnut Creek CDROM was founded in 1991 and began publishing Linux software in 1992, and BSD software in 1993. The company has a long history of working closely with the free software community and providing funding, staffing and other resources for open source projects. Walnut Creek CDROM publishes numerous software titles, including FreeBSD and Slackware, the most BSD-like version of Linux.

About Berkeley Software Design, Inc. (BSDI)

Leading BSD developers founded Berkeley Software Design, Inc. in 1991 to commercialize BSD technologies and continue the Berkeley Unix tradition of robust, reliable and extremely secure Internet operating systems for network computing. By merging Berkeley Software Design, Inc. and Walnut Creek CDROM, BSDI becomes the world's leading supplier of advanced Internet operating systems for the Internet infrastructure. Contact BSDI at [e-mail] or at www.BSDI.com or call 1-719-593-9445 (toll free: 1-800-800-4273).

BSD is a registered trademark and BSD/OS and BSDI are trademarks of Berkeley Software Design, Inc. Yahoo! and the Yahoo! logo are registered trademarks of Yahoo! Inc. All trademarks mentioned in this document are the property of their respective owners.