Oracle Denies Report About Offering Compromise on MySQL to Quell EC

 
 
By Chris Preimesberger  |  Posted 2009-12-04
 
 
 

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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