Friday, June 06, 2003

WSJ.com - Software Giant Oracle Offers $5.1 Billion to Buy PeopleSoft

WSJ.com - Software Giant Oracle Offers $5.1 Billion to Buy PeopleSoft "Software powerhouse Oracle Corp. Friday said it is making a $5.1 billion cash offer to purchase PeopleSoft Inc., the latest sign of consolidation in the still-slumping industry.
Oracle plans to offer $16 a share for PeopleSoft. Earlier this week, PeopleSoft unveiled a deal to snap up another software maker, J.D. Edwards & Co. In announcing its offer Friday morning, Oracle said it hadn't made a decision on whether the J.D. Edwards deal would proceed if its bid for PeopleSoft is successful."

Roll up for the magical mystery tour... $.07 (my standard bet) says this deal doesn't happen. SAP and Microsoft would stand to gain the most, if it did happen, since the conventional wisdom would almost certainly conclude that PeopleSoft (and JD Edwards) on non-Oracle platforms would atrophy.

Oracle and Apple have a lot in common -- they both seem to think it's okay to have fewer customers than their archrivals, as long as they have a larger percent of wallet from each customer, cradle-to-grave. Not a bad business model, in the grand scheme of things, but also one not particularly well aligned with Wall Street expectations, over the long run (unless you happen to also be a monopolist, of course).
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