Oracle denied a Dec. 4 report
in the New York Post that it is ready to compromise with the European
Commission over the status of MySQL so that the EC will sanction its
acquisition of Sun Microsystems.
Post reporter Josh Kosman, in a story headlined "Oracle Leader
Blinks," wrote that "Oracle boss Larry Ellison is backing down from
his vow to fight European antitrust regulators who oppose his company's $7
billion purchase of Sun Microsystems, offering to quarantine a Sun unit at the
heart of the conflict, two sources told The Post."
The Post did not obtain a reaction from Oracle itself. "This is completely
untrue. [We have] no clue where the Post got it!" Oracle spokeswoman Karen
Tillman told eWEEK.
Ellison has said several times that he believes the EC will sanction the deal
and that owning MySQL does not represent a conflict of interest and compete with his company's proprietary databases. The
U.S. Department of Justice approved the proposed $7.4 billion acquisition last
August.
Meanwhile, on the last day possible to do so, Oracle on Dec. 4 formally submitted its request for an oral hearing with the EC concerning its objection to the purchase of Sun.
Backing down from such a legal challenge is uncharacteristic of Oracle and its
flamboyant founder/CEO, Ellison. For
example, Oracle spent nearly two years (2003-2005) pursuing the acquisition of
competitor PeopleSoft after the Department of Justice originally roadblocked
the deal as an antitrust violation.
Ultimately, a federal judge overruled the DOJ
and allowed the deal to be completed.
Kosman, however, told eWEEK that he's confident in his two sources—one from the
banking business and another "close to the deal." "I wouldn't
write this if I wasn't convinced about the sources," Kosman said.
Another eWEEK source on the story suggested that the information might have
been floated to the Post to indicate in a backhanded way to the EC that Oracle
may be willing to negotiate—or possibly to manipulate the stock prices of
either Oracle or Sun. Sun's stock price was trading 2.7 percent higher at $8.45 two hours before close of the NASDAQ exchange.
Oracle, whose stock was flat at about $22.64 today, agreed on April 20 to purchase Sun for $9.50 a share.
Post source claims 'separate entity' for MySQL
The Post claimed in its story that "Ellison is now willing to create a
separate entity within a combined Oracle-Sun that houses Sun's MySQL open
database software business in order to get the deal completed before a hearing
Thursday [Dec. 10] by the European Commission."
That part of the story proves that the provider of the information to the Post—whoever
it may be—is out of the loop, Robert McLeod, founder and editor in
chief of Mlex, told eWEEK from his office in Brussels. Mlex is a specialized
market intelligence consultancy that advises various stakeholders on
international regulatory matters.
"Even if they put in the most far-reaching remedy tomorrow, the [EC] wouldn't
be in a position to make a decision before the end of the year, let alone by
the 10th. It just isn't possible," McLeod told eWEEK. "It's wrong and
... indicates this person's 'source' is far from this procedure—and in fact any
procedure involving the EC."
The EC, which serves as the law enforcement body of the 27-nation European
Union, is due to make a decision on Jan.
27, 2010, about whether to sanction Oracle's acquisition of Sun, so
Oracle can continue to do business in Europe.
Sun owns the code base and steers the international community of the MySQL
database, Oracle's largest open-source competitor. Sun bought MySQL in January
2008 for about $1 billion.
MySQL is a European-born database that is an important ingredient in running
enterprise Websites.
Competition Commissioner Neelie Kroes and other regulators are concerned about
Oracle owning such a popular competing product—MySQL's installed base has been
estimated at anywhere between 6 million and 20 million—and possibly slowing
down or stopping its development.
Dec. 10 hearing is the next step
Oracle now will have the opportunity Dec. 10 to argue to EC commissioners that
annexing Sun would not materially affect the world's enterprise parallel
database market.
Ellison has said several times that MySQL doesn't compete directly with Oracle's
proprietary databases. He also said Sun is losing $100 million and thousands of
jobs a month as customers old and new put sales on hold until they find out the
fate of the company.
Open-source activist and former MySQL shareholder and strategy adviser Florian
Mueller told eWEEK that if Oracle does indeed put forth the solution noted in the Post story, it would
be unsatisfactory to MySQL's creator, Michael (Monty) Widenius, and the
database's development community.
"Let's be cautious, but assuming that this is what Oracle offers, it's
definitely unacceptable for MySQL users because what MySQL needs is an economic
entity behind it that has every possible incentive to compete with Oracle's
core business and has no inhibitions in that regard," Mueller said in an e-mail.
"There has to be an unfettered business that really wants to succeed, grow
and innovate in every way imaginable, not a toothless tiger in a cage."
Oracle is investing a serious amount of money ($7.4 billion) and time into this
venture, which would immediately transform the Redwood City, Calif.-based
enterprise database and middleware company into one of the world's top 10 IT
systems providers.
The EC holds a great deal of influence in this case. Oracle sells its products in
just about every EU nation and stands to lose a huge amount of business if the
EC does not bless the deal.
Editor's note: This story has been updated to include confirmation of the Dec. 10 hearing between Oracle and the EC.
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