An effort aimed at publishing a Linux version that runs software programs from four different distributors of the open-source operating system could be in peril as Turbolinux Inc. struggles to stay afloat. But even if the company manages to stave off layoffs and office closings, an unfocused business model has the company headed in an uncertain direction that could kick off consolidation of the Linux distribution market, analysts say.

The future of Turbolinux looked bright after the Brisbane, California, company joined with three other Linux distribution companies earlier this year to create UnitedLinux, a joint effort whose ultimate aim was to make the operating system more viable in the corporate market. However, reports surfaced this week that cloud at least the company's immediate future as word circulated on the Internet that Turbolinux had shuttered its headquarters.

The president and chief executive officer of Turbolinux, Ly-thong Pham, issued a statement to Linux Today, an industry publication, that while the U.S. office is being restructured, the company remains open for business and will provide more details on restructuring plans next month.

Representatives from the U.S. office of Turbolinux did not respond to repeated requests for comment. The Japanese branch office was told that an expected round of funding from investors had not come through, and the company was "forced to conduct (an) urgent restructuring on July 15," said Fumiko Doi, marketing director of Turbolinux Japan. These layoffs caused the shutdown rumors, but they only affected the U.S. office, and do not mean the company as a whole is in danger of failing, she said.

The very nature of Turbolinux' business is cause for concern, said analysts.

The source code for open-source software, such as Turbolinux's distribution, can be viewed and modified by anyone under the terms of the GPL (General Public License). So, if another company coveted a feature of Turbolinux's distribution, it could merely view the source code, and create its own distribution based on the same code, said George Weiss, vice president and research director for enterprise servers and storage at Gartner Inc., based in Stamford, Connecticut.

"This is the strength and weakness of the open-source model: (the technology) is there, and it's not dependant on any one body, but it lowers the overall profit potential that vendors would like," said Weiss.

Turbolinux had tried to differentiate itself as a Linux distributor to Asian countries. The company has offices in Tokyo, Beijing, Hong Kong, Taipei, and Seoul, and made versions of Linux optimized for Asian languages. But it missed out on a huge market in its own backyard.

The Chinese government has embraced open-source software, but chose to sponsor a version of Red Hat Inc.'s distribution over Turbolinux's, said Dan Kusnetzky, vice president of system software at IDC, in Framingham, Massachusetts.

Analysts attribute most of Turbolinux's troubles to the company's haphazard marketing and product strategies. Turbolinux was trying to move away from being a Linux distributor to selling products that run on top of Linux, said Stacey Quandt, an analyst at Giga Information Group Inc. in Santa Clara, California.

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