Monday, May 24, 2004

Economist.com | Articles by Subject | Oracle v Peoplesoft

Economist.com | Articles by Subject | Oracle v Peoplesoft "Presiding over the trial of the DOJ suit is Vaughn Walker, a judge who is unusually expert in antitrust law, and who has previously tangled with the DOJ's antitrust arm over a newspaper sale in 2000. Many of the DOJ's published witnesses are Peoplesoft customers, who from the beginning have felt threatened by Oracle's bid. Oracle has gathered what looks to be a broader mix, including rival software firms, customers and economists. Both Mr Ellison and Craig Conway, Peoplesoft's boss, have been called to testify.
Perhaps Justice Walker will discover reason and evidence in the government's case. Then Oracle would need to find new sources of growth in a maturing market. But Peoplesoft would then face the challenge of repairing a business that has weakened significantly during the lengthy bidding war. And if the DOJ should lose? Peoplesoft would be left with a damaged boss (and board), a falling share price and, perhaps, a full-scale shareholder revolt. Whether or not Mr Ellison would then choose to continue to pursue his bid (perhaps with an even lower offer), Oracle would probably emerge the winner. As the title of a recent book about Larry's art of war puts it, everyone else must fail."
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