In the last issue, I wrote that I'm still not sure that Novell can come up with the right business model and mix of products to keep the balance sheet in the black. When I wrote that, I'd forgotten that Novell was just about to release its first quarter financial statements. But when the report came out late last week, it pretty much confirmed what I said. You can read Novell's financial press release\u00a0for yourself, although I find the turgid prose of these reports to be both mind-numbing and scream inducing ("On a non-GAAP basis, adjusted net income available to common stockholders for the first fiscal quarter 2006 was $18 million, or 4 cents\u00a0per diluted common share, excluding stock-based compensation expense, the benefit from restructuring reversals and adjustments for income taxes, debt interest expense and the allocation of earnings to preferred stockholders"). I much prefer a simpler balance sheet: we took in $X, paid out $Y, and the difference, $Z, is how much profit (or loss) we had. Starbucks doesn't sell lattes for pre-GAAP, post-GAAP, non-GAAP or Gap-for-kids basis, after all. The bottom line is that for the first quarter of the fiscal year 2006 (which, for Novell, is the calendar months of October, November and December, 2005), revenue was down from the previous year. In fact, revenue has been essentially flat (if not down) when adjusted for inflation over the years of this century:* 2006 1st Quarter - $274 million* 2005 1st Quarter - $290 million* 2004 1st Quarter - $267 million* 2003 1st Quarter - $260 million* 2002 1st Quarter - $271 million* 2001 1st Quarter - $245 million* 2000 1st Quarter - $316 millionThe reasons are not hard to grasp, though. NetWare license sales are down, Linux license sales haven't picked up the slack. It's true that Novell's revenue is still much higher than those of its competitors, such as Red Hat, which reported third-quarter 2005 (the last available) revenue of $73 million. But Red Hat also reported net income of $23 million while Novell could only claim $2 million in net income.I don't expect Novell to disappear overnight, but every weak quarter makes it a more vulnerable takeover target. And, of course, every takeover rumor leads to people delaying purchases of Novell products, which leads to decreased revenue, which leads to takeover rumors.But I'll repeat what I said last issue: Keep the NetWare servers running as long as you can but at the same time learn Linux. If Novell disappears, NetWare will also, but there most likely will be Linux (and Unix) servers for many years to come.