EC Puts the Brakes on Oracle's Sun Acquisition

The news on Thursday that European Union antitrust regulators have launched an in-depth probe into Oracle's $7.4 billion takeover of Sun Microsystems on competitive concerns was the worst outcome for the two firms as they are both left paralyzed for an indeterminate length of time.

The European Commission, the competition watchdog of the European Union, set a January 19, 2010 deadline for its decision, putting Oracle months behind its original plan for closing the deal.

In the meantime, Oracle has an action plan for Sun that it cannot put into motion, and Sun has no effective leadership to help defend its continued losses and defections of customers.

HP and especially IBM have been offering discounts and other incentives to steal away Sun customers since Oracle agreed to buy Sun in April. Between that, concerns about Oracle as the owner of Sun, and rumors Oracle would turn around and sell Sun's hardware business, IBM and HP have not had to make a particularly hard sell.

"It certainly kills the value of it," James Staten, senior analyst with Forrester, told InternetNews.com. "You just know that IBM, HP and Dell are frothing at the mouth. They've already stolen a significant chunk of their sales before the delay, now with this delay they are just going to go hog wild."

Sun declined to comment, while Oracle only issued a statement acknowledging the EC investigation.

All because of MySQL

Sun walked away from a possible merger with IBM in April because it feared a protracted antitrust investigation by the U.S. Department of Justice, since the two firms were both in the hardware business. The DoJ signed off on the Oracle/Sun deal on August 20.

Now, the problem all stems from MySQL, an open source database worth about $300 million to Sun. For a giant like Oracle, that's a small amount, but that's what the EC is focused on in its investigation. Read the rest at InternetNews.com.