Oracle Denies Reports of MySQL Capitulation

Oracle today denied a report in a New York newspaper that CEO Larry Ellison is backing down in a dispute with the European Union over the Sun Microsystems acquisition and will acquiesce to EU concerns regarding the ownership and management of the MySQL database.

The New York Post ran an article citing two sources that claimed Ellison is now willing to create a separate entity inside of Oracle (NASDAQ: ORCL) to house the MySQL database software business in order to get the deal completed before a hearing on December 10 by the European Commission.

The sources went on to say that Ellison would propose the creation of a “firewall” between MySQL and the rest of the combined company, and possibly set up an entirely separate board for the MySQL business.

The Post did not have comment from Oracle, but a spokesperson for the database giant categorically denied the claim to “It’s completely untrue. We have no clue where they got it from, and we’re not saying anything else,” said Oracle spokesperson Karen Tillman.

The rumor briefly inflated Sun (NASDAQ: JAVA) shares in early trading but faded to a modest gain on the day as Oracle’s denials hit news wires.

Oracle’s proposed $7.4 billion acquisition of Sun has been twisting in the wind for eight months now, thanks to a protracted investigation first by the U.S. Department of Justice, which eventually signed off on the deal, and the EU’s commission on competition which is currently holding up the deal’s completion. The only concern cited by the EC was MySQL, the open source database Sun purchased last year.

Oracle has fought to keep MySQL rather than divest it to get the EU off its back. CEO Larry Ellison has repeatedly stated he has no intention of stifling or obstructing the popular open source database, and that he intends to invest more in the software.

The EU’s reaction isn’t known

IT analyst Merv Adrian, president of IT Market Strategy, said it could have gone either way. “It’s always possible that ideas are floated and denied in public, regardless of what ‘official’ statements say. What we learned was that the market liked the idea that Oracle might show some flexibility. What we did not learn – publicly – was whether any of the relevant EU people felt the same way,” he told in an e-mail.

“It’s far from clear what would make [the EU] happy – but it remains true that Oracle wants to use MySQL to compete with Microsoft. Why the EU continues to be unable to see the value of that remains puzzling. MySQL did not have the benefit of a large aggressive sales organization before, and with the acquisition, it would,” Adrian added.

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