The Justice Department might be about to turn on him, but Oracle CEO Larry Ellison remains defiant and predicts he will take over PeopleSoft in the end.
"We think we will be able to buy PeopleSoft," he said. "PeopleSoft has engaged in a very long and laborious lobbying effort with the Justice Department to persuade them that there are in fact antitrust problems with the merger of these companies. That is, if you're defining the market extremely narrowly. We don't think that those arguments will prevail in the end."
Ellison accused PeopleSoft Chief Executive Craig Conway of being disingenuous to propose combining the two companies applications software businesses more than 14 months ago and now to oppose a merger. "With Craig running it, he thought it was a great idea," Ellison said. "With me running it, he thought it was an antitrust issue".
If the Justice Department does rule against Oracle on 2nd March as seems inevitable, Ellison may mount an appeal. The Justice Department's decision will most likely centre on the definition of the market for business software in which Oracle and PeopleSoft compete. A likely Oracle defence is that Oracle and PeopleSoft combined would still be well behind SAP in market share.
Most analysts appear to believe the deal is sunk however with several urging Oracle to move on to new targets. "We expect (Oracle) to grow through acquisition even if its PeopleSoft bid is foiled," said Patrick Walravens, a JMP Securities analyst. "There are a number of smaller suite vendors with strong products, hundreds of millions of dollars in revenue and thousands of customers that might make good acquisition candidates for Oracle".
But Ellison seems fixated on PeopleSoft. "PeopleSoft is an unusual transaction for us," he said. "We can make an investment in a startup, but there is not very much of that any more. Usually our behaviour is identical to Microsoft. We have the fundamental belief that you have to build property. You really can't buy that. If you want the pieces to be integrated, you just can't buy them."