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Oracle Trial Comes Full Circle

No wonder Oracle czar Larry Ellison wants to acquire the likes of PeopleSoft. The way his legal defense team sees it, everybody is out to get him.

The software vendor wrapped up its final day of defense in an antitrust suit filed by the U.S. Department of Justice and 11 states. The government sued to block Oracle's unsolicited bid to take over the assets and customer contracts of PeopleSoft, saying the $7.7 billion deal would limit choice and create uncertainty in the enterprise resource planning (ERP) market.

And this one ended just about as controversially as it started.

Documents produced in court Thursday pointed to an IBM memo implying that the company was fearful enough of an Oracle/PeopleSoft merger that it considered launching a "campaign of FUD" (fear, uncertainty and doubt) against Oracle. The tactics included IBM support of PeopleSoft through a blanket of analyst, press, customer and regulatory authority statements.

A separate memo suggested that IBM consider acquisitions of middleware companies as a counterstrike to help prevent Ellison and Co. from edging into the competitive mid-market.

In another chart titled "Predators' Ball," IBM looked at acquiring Microsoft, Oracle and SAP.

The document was reminiscent of the first day of the four-week trial that uncovered plans by Microsoft to acquire SAP while taking a minority investment in PeopleSoft to make sure they stayed independent.

The trial took many exciting twists and turns, including a media frenzy when Ellison himself took the stand this week to recount his conversations with PeopleSoft CEO and former Oracle executive Craig Conway. Oracle lawyers later dismissed Conway as a witness.

Ellison revealed that Oracle was still considering three or four other acquisitions of unnamed public companies, including one that specializes in business-intelligence software, a pure software application company and a middleware infrastructure company.

In earlier videotaped testimony, Ellison recounted some of the rationale for acquiring not only PeopleSoft but as many as eight different others, including Siebel, Lawson and J.D. Edwards (later acquired by PeopleSoft). Siebel and Lawson had approached Ellison separately with their own merger proposals.

District Judge Vaughn Walker will now spend the next few weeks looking over the evidence.

At issue is the role of ERP software, which help companies manage back-office functions such as human resources or financial services, and how it relates to Oracle's traditional database products. No one, not even the U.S. Department of Justice, denies that SAP AG is the leader in the marketplace. Oracle is arguing that the ERP definition is too narrow and must be widened to include Microsoft and IBM, as well as Fidelity and Ceridian, who are also bending the rules when it comes to ERP, according to Josh Wenderoff, a consultant for Oracle.

Oracle lead attorney Dan Wall said the government's stance was very limiting, and that they only spoke with the Oracle executives whom Oracle's defense team had called to the stand.

"The government sued to block Oracle's acquisition of PeopleSoft because it would harm competition," R. Hewitt Pate, assistant attorney general in charge of the DoJ's Antitrust Division, said in a statement.

Lawyers for Oracle and the DoJ will file their Proposed Findings of Fact and Proposed Conclusions of Law on July 8, and their post-trial briefs on July 12. Closing arguments are scheduled for July 20.