Why is Sun Micro losing $100 mn a month?

Oracle Corp Chief Executive Larry Ellison said Sun Microsystems Inc is losing about $100 million a month as European regulators delay approving his company's $7 billion purchase of the struggling hardware maker.

"The longer this takes, the more money Sun is going to lose," Ellison said on Monday evening during a dinner at one of Silicon Valley's most prominent speaker's forums, the Churchill Club.

Sun's revenue has tumbled since April when Oracle agreed to buy the world's No. 4 computer server maker in April as rivals IBM and Hewlett-Packard Co have poached customers amid uncertainty about its future.

Oracle has pledged to boost investment on development of Sun's products, but the hardware company has cut spending prior to the deal's closing as sales have plunged. Last month it reported a quarterly loss of $147 million.

Ellison, the world's fourth-richest man according to Forbes, said he expects the deal will eventually be cleared by European regulators as it was in the United States, without any conditions.

The European Commission is conducting an in-depth probe into whether the competition would be stifled by the combination of Oracle's database, the world's top seller, and Sun's MySQL database, which is widely used to run popular websites.

Legal experts have said Oracle may need to make concessions, including the divestiture of the MySQL software business, and that it is unclear how long European approval would take.

European regulators have until January 19, the deadline set by the Commission, the competition watchdog of the 27-country European Union. That would put Oracle months behind its original plan for closing the deal by the end of August.

Agencies

Sun-Oracle deal gets OK from US Justice Dept

Business software maker Oracle Corp said it has received the Justice Department's approval to move forward with its $7.4 billion acquisition of former dot-com-era star Sun Microsystems Inc.

The deal still needs to get the go-ahead from the European Commission.

Clearance by the Justice Department had been held up over questions about the licensing of Java, a programming language that Sun invented that now runs on more than 7 billion electronic devices around the world, including cell phones and personal computers.

Sun's shareholders approved the deal in July. Another potential antitrust question could surround Sun's MySQL database, an open-source product. Some worry Oracle could make MySQL a lower priority as it tries to boost sales of its market-leading database software.

Sun's performance had been shaky for nearly a decade before Oracle outbid IBM Corp. for the Santa Clara, California-based company in April. IBM is one of Oracle's biggest database software rivals, and is a major Sun rival in computer servers.

The Sun acquisition will give Oracle more control over the development of Java, a key technology used in its products, and also thrust the Redwood Shores, California-based company into hardware, a new area for Oracle.

The Justice Department's approval was expected. Oracle's stock rose 17 cents to $22.11 in after-hours trading, having finished the regular trading session up 16 cents to close at $21.94.

Agencies