A brief history of Linux

In the late 1970's Microsoft licensed UNIX source code from AT&T which at the time was not licensing the name UNIX. Therefore Microsoft created the name Xenix. Microsoft did not sell Xenix to end-users but instead licensed the software to software OEMs such as Intel, Tandy, Altos and SCO who then provided a finished version of their own Xenix to the end-users or other customers. SCO introduced its first version of Xenix named SCO Xenix System V for the Intel 8086 and 8088 in 1983. Today SCO Xenix is one of the more commonly used and found versions of Xenix.

Linux was based on Minix. A UnixLite OS designed to run on PCs. However, it was really only a teaching tool. Andrew Tanenbaum repeatedly refused to add the new (legitimate) features the users and even developers asked for. Linus Torvalds set out simply to add functionality to his own version of Minix (the copyright allows use to do so for your own personal use, but you cannot sell or distibute it).

Over time, in adding functionality to Minix, Linus Torvalds found that he had created an entirely new kernel. I was very similar to Minix but used none of the Minix source code. Torvalds had originally called it freax, for "`free' + `freak' + the obligatory `-x'. The operator of the FTP server where Linus' new kernel made its debut didn't like the name and simply called it Linux (Linus + Unix). People seemed to like the name so it stuck.

source : http://adequacy.org/public/stories/hacker.comments.page.1.ht ...