Ellison's Testimony Unusually Modest in Antitrust Case

Larry Ellison was the hottest courthouse ticket in town Wednesday, but Oracle's ( ORCL) billionaire CEO left an overflow audience of lawyers, reporters and Wall Street analysts wondering what all the fuss was about.

Taking the witness stand during the last week of testimony in an antitrust trial aimed at blocking his firm's acquisition of PeopleSoft ( PSFT), Ellison admitted that he was outmaneuvered by the rival software maker during the early phase of the takeover battle. He also said his company is actively looking at "three or four" other acquisitions.

Not surprisingly, Ellison did not name names of potential targets, only repeating news that was revealed earlier in the trial that Oracle is interested in other software application vendors, infrastructure suppliers and business intelligence companies.

"We thought the only way we could survive and prosper was through an acquisition strategy," said Ellison, who eschewed his usual garb of jacket and black mock turtleneck for a gray, double-breasted suit, white shirt and red tie.

Companies that could fit the bill -- and were also named on a shopping list introduced earlier in the trial -- include Siebel Systems, ( SEBL), BEA Systems ( BEAS), Business Objects ( BOBJ), Sybase ( SY), Lawson Software ( LWSN) and Cerner ( CERN).

The government claims Oracle's proposed $7.7 billion hostile takeover of PeopleSoft would stifle competition at the highest end of the software market, leading to higher prices and a slowing of innovation. The government claims just three companies -- Oracle, PeopleSoft and SAP ( SAP) -- have the advanced human resources and financial management software needed to automate back-office functions in complex business enterprises.

Claude Scott, who has led the government's case against Oracle, hammered on that point during a two-hour cross-examination. But Ellison insisted that "every day the competition is getting worse. Every day there are competitors pushing our prices down."

Ellison's testimony was highly anticipated; on Tuesday an Oracle spokeswoman said she had gotten at least 40 calls that day asking when her boss would take the stand. On Wednesday, a gaggle of photographers waited for Ellison at the entrance to San Francisco's Federal Building, while a long line of spectators stood outside the courtroom for about an hour, hoping to get seats.

But Ellison, who had obviously been well coached for his appearance, stuck to the script and provided little new information -- other than a slightly more detailed account of abortive mergers talks between Oracle and PeopleSoft that took place in the spring of 2002.

Rather uncharacteristically, he admitted that PeopleSoft had done a better public relations job than Oracle, and had convinced some customers that his company would force them to switch to Oracle products should the bid succeed. But he firmly rejected the government's contention that Oracle had originally planned to force such migration. "We never changed our position, but they did a great job on the PR side," he said.

Testimony in the trial could end as early as Thursday, but closing oral arguments won't be made until July 20. The case will be decided by U.S. District Court Judge Vaughn Walker, who is not likely to announce his decisions until sometime in August.

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