Ellisons testimony discredits PeopleSofts carefully cultivated public image that it was righteously struggling to preserve its independence against the aggressive buyout demands of a larger, richer and more powerful Oracle. The testimony showed that PeopleSoft was just as worried about remaining competitive in the ERP (enterprise resource planning) market as Oracle and was prepared to consider a merger with its archrival in the U.S. market. However, Department of Justice attorneys denied Wednesday that Ellisons testimony seriously damaged its antitrust case against the Oracle buyout.The testimony showed that the Oracle bid for PeopleSoft wasnt about acquiring technology; it "was about buying customers rather than competing for them in the old-fashioned way," added Renata Hesse, a DOJ trial attorney. Ellison, as always dapper in a tailored suit and tie, was on the stand more than for more than two hours Wednesdayunder direct examination for just under 30 minutes by Oracle lead attorney Daniel Wall and under cross-examination for more than 90 minutes by DOJ lead attorney Claude Scott. Scott presented documents to support the governments contention that Oracle initiated the buyout to disrupt PeopleSofts business plans and complicate its buyout of ERP software vendor J.D. Edwards. This included a June 9, 2003, e-mail from Joe Reese, an investment banker who was advising Oracle on the PeopleSoft bid, who described the initial bid as a "twist in the wind strategy." Reese advised that Oracle stand firm with its initial bid of $16 per share for PeopleSoft "to create doubts in the minds of the market." Over time "we should see a decline in the price" of PeopleSoft. Ellison noted, however, that PeopleSofts price actually increased as the summer wore on and that Oracle had to sweeten its bid to retain the interest of PeopleSoft shareholders. Ellison also denied that Oracles buyout bid was an effort to snap up both J.D. Edwards and PeopleSoft at the same time. Ellison said Oracle was hoping to convince the PeopleSoft board of directors to accept its bid as a more sensible business alternative to the J.D Edwards merger. However, the Oracle bid failed to derail PeopleSofts acquisition of J.D. Edwards. Next Page: No long-term support for PeopleSoft apps?
The DOJ "would have still analyzed the transaction in the same way" no matter who proposed the merger, whether it was PeopleSoft or Oracle, said Thomas Barnett, deputy assistant attorney general in the DOJ antitrust division. "Our investigation would have still led to the same place," that the transaction would be anti-competitive in the market for enterprise business application software, Barnett said.