I paid 67.13 per share for Red Hat in 03/09/2000. The stock is now still cheap from this price. Their are a large number of stockholders who have a large amount invested in Red Hat back in 2000 at higher prices than this.
Based on the growth of Red Hat and the demand the stock will recover in the near future. It is still a bargain stock.
Google going open source and looking to compete more directly with microsoft in its spreadsheet and os software. Smoke and fire go together. Upgrades and the stock is looking to break out of its range not a bad combo.
1) RHT has strong gross profit margins, so there would be no dillution of Google's margins.
2) Google is tip-toeing into the applications piece of software, so Red Hat's middleware and operating system would provide a nice base to sit on.
3) Google HATES Microsoft. Red Hat HATES Microsoft. At the very least the two would have a nice chat on how a combination could work for each.
4) A Google/Red Hat combination would provide a nice platform from which to promote Red Hat.
5) Synergies with cost savings could be attained, especially in China where both are trying to push heavily.
I honestly think it will happen....and in the not-too-distant future (3 months).
Only reason I could think of was to take the fight to microsoft on all fronts. Follow same pattern control the operating system (well create it with developers) throw in your search technology and dominate the internet from end to end. Already have the piece msft was after with search and advertising and if you beat them at their own game it becomes much easier and a justice department here and in EU on your side. Long shot but stranger things have happened sure the opensource guys would love free distribution through google sites. Old adage best defense is a good offense.