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Oracle Gets a One-Week Extension on Sun Deal

Oracle gets more time from the EU to defend its purchase of Sun Microsystems, while some are calling on the company to sell off MySQL.

November 20, 2009
By Andy Patrizio: More stories by this author:

Oracle has been granted a one-week extension to defend its proposed $7.4 billion purchase of Sun Microsystems before regulators at the European Commission. The deadline extension to January 27 effectively adds six more working days to the deadline.

The extension was requested due to the holiday season, particularly Thanksgiving, interrupting business dealings and schedules in the U.S., according to an Oracle (NASDAQ: ORCL) spokesperson.

Earlier this month the commission, which has a say-so in large American mergers that impact European business, issued formal objections to the deal based solely on Sun's ownership of the open source MySQL database. It argued that Oracle's ownership of MySQL posed a threat to competition in the market for database software.

Oracle has maintained in multiple public statements from CEO Larry Ellison that it will not stunt, stymie or otherwise interfere with MySQL, but to the contrary, it plans to invest in the open source database and put more resources into it.

In issuing its objection, the commission said it felt Oracle had not been cooperative in answering their questions. Publicly, Oracle has been its usual defiant self.

"The transaction does not threaten to reduce competition in the slightest, including in the database market," the company said in a public statement. "The Commission's Statement of Objections reveals a profound misunderstanding of both database competition and open source dynamics."

"It is well understood by those knowledgeable about open source software that because MySQL is open source, it cannot be controlled by anyone. That is the whole point of open source," it added.

Oracle's position was supported by Marten Mikos, former CEO of MySQL, who sent an open letter to EC commission chair Neelie Kroes stating his position that the deal would not harm MySQL in any way and would probably help it.

Arguing against the deal and a proposal to sell-off MySQL

On the other side, however, was MySQL founder and creator Michael 'Monty' Widenius and Florian Mueller, a MySQL shareholder and consultant until the Sun acquisition in 2008. Mueller has been instrumental in leading the countercharge against Oracle.

Widenius said in his blog that Mueller "helped us to demonstrate to the EC the need to investigate this merger and he is now on board again to meet the information needs of regulators, journalists and analysts."

Mueller had his own reaction to the delay. "Oracle is now apparently backtracking from previous claims that the European Commission has no credible theory of harm. If the EU's objections were baseless, Oracle wouldn't need more time now to develop its arguments. This is another sign of enormous weakness only three weeks after Oracle withdrew its antitrust application in Russia," he said in a statement to the media.

"One more week won't change the fact that MySQL competes fiercely with Oracle's database products including its flagship '11g' across all major market segments. One more week won't transform a traditional company product like MySQL into a community project that could be developed by volunteers just because it's open source. The best way Oracle can make use of this extra week is to think really hard about selling MySQL to a suitable third party," he added.

But Merv Adrian, president of IT Market Strategy has a different perspective. "In fact, this suggests that Oracle is taking the issues seriously, that they realize a bit of blustering won't be enough, and they have decided to take on the EU on a substantive basis," he said in an e-mail to InternetNews.com.

"It's a sign that they are not giving up, and they believe their case can be made. In light of the blows to Sun this process has already inflicted, one might have expected them to back down - clearly the EU did. I'm more inclined to believe the contrary - Oracle is ramping up, albeit belatedly, to contest the issue," Adrian added.


TAGS: Sun Microsystems, open source, Larry Ellison, Oracle, MySQL




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