What would Larry do?

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What a difference a few years make. A couple of years ago when Oracle embarked on its seemingly never ending spending spree to gobble up a sizable chunk of the applications market, we all thought about CEO Larry Ellison's sneering comment of a few years earlier that it was easy to write cheques, not so easy to write software. Now that he's shifted his position, it's interesting to note that people now reckon that the thing to think about before any acquisition is 'What would Larry do?'.

The debate was aired this past week in an article in The New York Times in relation to Microsoft's hostile takeover bid for Yahoo. The thrust of the piece is the thesis that if Microsoft thinks this is the right time to try a major acquisition on a scale it has never tried before, it shouldn't be chasing Yahoo, but some other business software player that is on a par with its target market. This is – according to one Professor Cusumano, a boffin at the Sloan School of Management at the Massachusetts Institute of Technology – the approach taken by Oracle in its 37 acquisitions since 2005.

Cusumano has an interesting suggestion: rather than acquire Yahoo, Microsoft should pursue SAP. Yes, that old chestnut again. The story so far: we know for certain that the two companies held merger talks in late 2003, a face that was uncomfortably revealed on the eve of the court case over Oracle's takeover of PeopleSoft. Since then, it's popped up every so often, most recently late last year. Both sides regularly issue denials while Wall Street equally regularly refuses to believe them entirely...

The New York Times notes the irony that if Microsoft was to follow this advice, then the most “Larry-like choice” would be for Microsoft to acquire SAP and run it as an autonomous division, a course of action that would also be the most uncomfortable for Oracle. You know, that alone almost makes it worth considering....

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