Defining the market

By John Pallatto  |  Posted 2004-09-20 Print this article Print

It was also clear that it was Microsofts intention to enter the enterprise market when it discussed a potential merger with SAP after hearing about Oracles tender offer for PeopleSoft, as Keating conceded in his testimony.

The European Commission cant ignore the testimony in the U.S. case when it considers the credibility of the "Big Three" market definition that has been presented on both continents.

Judge Walker didnt swallow Microsofts testimony, with good reason, writes Microsoft Watchs Mary Jo Foley. Read more here.
European regulators are no different from their U.S. counterparts. They are sensitive to public opinion and the shifting tides of political influence. But at this point it is hard to believe that the European Commission will reject the buyout and make it stick. Such a decision would likely just result in another appeal and another trial using much the same evidence, arguments and expert opinion that has already been presented in the U.S. court.

Click here to read why analysts believe its legal maneuvering will go on for a long time before Oracle learns the ultimate fate of its buyout bid for PeopleSoft.

The result will probably be the same: The European regulators will find it no more easier to prove its case than the U.S. Justice Department. Oracle will win the case and the right to keep pursuing PeopleSoft.

But once again, there will be another delay of at least half a year while Oracle pursues the appeal. The longer the case goes on, the more market uncertainty PeopleSoft has to deal with. PeopleSoft may find that its market share and financial condition will continue to erode while it is held hostage by the interminable legal maneuvers.

The delay doesnt hurt Oracle one way or another. The repeated delays could wear down PeopleSofts resistance until it finds it has no choice but to accept the deal. Even if Oracle never succeeds in buying PeopleSoft, the delays will have seriously disrupted its business plans and perhaps permanently stunted its growth.

SAP hasnt officially expressed an opinion on the buyout. But there are indications that SAP wouldnt mind clearing the field of a pesky competitor any more than would Oracle. With PeopleSoft out of the way, SAP will find it easier to solidify its own position in Europe and might find it easier to make inroads into the North American market.

One thing is clear: Through all of these legal maneuvers, PeopleSoft cant expect any help from the courts on either side of the Atlantic. It will have to rely entirely on its own resources – including the goodwill of its shareholders and the determination of its board of directors to remain an independent company.

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John Pallatto John Pallatto is's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.

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