PALO ALTO, Calif. (CNN/Money) -
If you don't like watching a good fight, click away right now. Because for as long as it goes, the Oracle-PeopleSoft brouhaha promises to be a knock-down, drag-out, come-at-each-other-with-everything-you've-got affair.
It's interesting that on the day when both sides really took off the gloves -- Oracle (ORCL: Research, Estimates) with a PeopleSoft-bashing investor's call; PeopleSoft (PSFT: Research, Estimates) with an enriched bid for rival software maker J.D. Edwards -- neither stock moved much.
The Nasdaq composite ran its latest installment of "Techs Gone Wild" Monday, with the index up 2.5 percent. But Oracle shares crept up only a little more than 1 percent, with PeopleSoft's shares down about the same percentage. Investors are clearly watching and enjoying. But it's too soon for investment decisions about the two sparring partners.
After all, it's only the early rounds.
To recap, PeopleSoft arguably started the show with its friendly offer, announced June 2, to buy J.D. Edwards. It was one of several amicable deals in the tech world that showed how consolidation at last is making Silicon Valley look like the rest of the business world. Before the week was out, Oracle had launched a hostile bid for PeopleSoft.
Two weeks later, things had gotten nasty. Oracle held a conference call with investors Monday and showed data designed to enrage Craig Conway, PeopleSoft's CEO and a former Oracle sales executive. Among Oracle's slides was a comparison of the two companies' stocks since May 24, 1999, which a footnote helpfully explains is the day Conway started at PeopleSoft. Oracle's stock is up 116 percent since then, versus a 33 percent decline for PeopleSoft.
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In newspaper ads, Oracle showed the sorry state of growth -- lack thereof, actually -- of PeopleSoft's licensed software revenue since the end of 2001. The bar chart shows five consecutive quarters of negative growth. Of course, what Oracle didn't pay big bucks to advertise is that until its most recent quarter, it experienced six consecutive quarters of negative growth in new license software revenue.
There's more. Oracle's slides, posted at its Web site, make a compelling case for why Oracle should buy PeopleSoft.
Pretty slides, however, didn't satisfy investors, who peppered Oracle management with hostile questions about why Oracle isn't raising its offer for PeopleSoft. They also wanted to know if PeopleSoft having adding a cash component to its bid for J.D. Edwards invalidates the bid for PeopleSoft by Oracle, which supposedly tolerates no changes to the other deal.
Oracle's top executives on the call didn't have a good answer to that question. An archived version of the conference call appears on Oracle's site. But you won't hear the Q&A, which Oracle chose not to post. One investor called the Q&A session "embarrassing" to Oracle.
Call this the third round or so of a championship bout. The heavy punches are undoubtedly still to come.
Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at firstname.lastname@example.org.
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