Time for PeopleSoft Directors to Admit Defeat

  • Mercury News: Oracle wins backing of 61% in PeopleSoft offer. PeopleSoft’s board has shown no signs of backing down from its opposition to the $24-a-share deal, putting it on the controversial path of defying the will of a majority of its shareholders. Oracle still faces a PeopleSoft “poison pill” plan designed to flood the market with PeopleSoft shares, making it prohibitively expensive for a hostile acquirer to close a deal.

  • It’s time for the PeopleSoft board to make the deal. Maybe the current offer of $24 a share is too low; certainly Oracle could go higher, and probably will.

    But the continued opposition even to a serious discussion should end. The shareholders have spoken, loudly. They are willing to see a deal at the right price — and it’s obviously not too distant from the one Oracle has offered.

    If the board continues to block this deal, it will be mocking shareholder wishes. Of course, that’s nothing new in today’s corporate world.


    Posted by: on November 20, 2004 07:56 AM

    Well, as both a PeopleSoft and an Oracle customer, I can assure you that this is a deal that PeopleSoft’s customers do NOT want to see happen. Whenever CA buys a company, we immediately drop the software we were considering and plan to migrate from whatever we are using. Oracle’s not that bad, but we don’t want any more of their stuff than we already have. They are a horrible company to deal with.

    Posted by: Seun Osewa on November 20, 2004 03:29 PM

    This is definitely bad news, of course. How did they pull if off? It only goes to show that investors in public companies are not investors in the full sense of the world. The stock system is flawed; the only way to get a return on investment in stock is to sell it at a higher price. Unfortunately, the price depends directly on public perception of the company and stock market dynamics, not really the performance per se.

    Posted by: Mark Cianca on November 20, 2004 03:55 PM

    This isn’t an issue that is as black and white as you present it, Dan. If the only responsibility a board shares is for fiduciary gain on behalf of its stockholders, then the company owes no debt to the public good or its customers. I doubt that’s where you’re headed with this.

    I work for a major research university in the Bay Area. We have just completed an implementation of a suite of PeopleSoft’s products.

    Projects like the one we’ve just completed occur only once or twice in a person’s career. Why? Because the cost of such a venture requires that we determine that the project and the benefits it promises to deliver are sound. In the end, major software implementations are undertaken to create capacity and manage risk. We derive no other ROI or tax benefit from such a venture.

    I know what it took for our institution to make the decision. Such a decision wasn’t taken lightly; nor was it made with any haste. The cost of failure in a public institution is simply too high.

    My institution licenses some Oracle products. We do so based on internal standards and risk management. However those licenses come from Oracle’s database products. Database products have been and remain Oracles core competency. The company’s current stock value certainly doesn’t reflect its skill as an applications vendor…

    Ellison’s desire to acquire PeopleSoft continues a move his company has taken away from its core competencies. It is a move that is motivated not by the good of his customers or the good of PeopleSoft’s customers. From my perspective, it is merely a byproduct of greed and avarice.

    I do not trust Oracle. I have done business with them too much to ever have faith in their sales teams or the Ellison lieutenants who push their sales staff into business tactics that are at best uncomfortable for the customer, and at worst of questionable ethics.

    As a PeopleSoft customer, I feel that the board is the only group looking out for the customer base. From your perspective, PeopleSoft’s board is mocking its shareholders. From mine, they are currently acting as the sole voice of the customer base.

    To my knowledge, Larry Ellison has never been hailed as a champion of his customers. For public sector customers like us, this deal remains a bitter black cloud.

    Posted by: Dan Gillmor on November 20, 2004 05:24 PM

    I don’t disupte that this will be bad for PeopleSoft customers. But the shareholders own the company, not the customers. As corporate law works today, the board has far, far more obligation to the shareholders than any other constituency. I’d like to change that, but it’s reality.

    Posted by: on November 21, 2004 02:58 PM

    To potentially avoid situations like this in the future, it would seem that companies should consider purchasing stock of the companies they buy product from (at least the big investments). That way, they at least would have some say (depending on how much stock was owned) in the future direction of the company. If you’re making a $5-10 milllion investment in a company’s product, what’s another 250k one way or the other over time?

    Posted by: Seun Osewa on November 21, 2004 03:22 PM

    Jojo, if you don’t own enough of the stock you don’t have any control over the company

    Posted by: on November 21, 2004 07:37 PM

    Yes, I know that. What I was thinking was that if all the companies that brought the product also brought stock, together, they might have enough to have some influence, if not complete control.

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    FDA’s Incompetence, or Malfeasance?

  • AP: FDA Saw Problems at Vaccine Plant in 2003. Documents provided by the FDA to a congressional committee show that inspectors uncovered contamination and unsanitary conditions at a Chiron Corp. flu vaccine manufacturing plant in England in 2003. Yet the agency did not re-inspect the facility until similar problems caused the loss of roughly 50 million flu shots destined for the United States.
  • Reuters: Congress Told FDA Failed Public on Vioxx. Committee Chairman Charles Grassley, an Iowa Republican, said he was concerned the FDA had a “far too cozy” relationship with drug companies and suggested an independent office of drug safety might be needed.

  • Comments

    Posted by: Ted Feuerbach on November 19, 2004 09:28 AM

    The influenza vaccine issue is clearly an inexcusable disaster. Heads should roll.

    The Vioxx thing is a bit more complicated and the reporting on the subject is sorely lacking. There is a missing piece of information from all the news reports that I’ve seen about Vioxx and it is the critical thing in determining if the FDA is right or wrong and if Merck is right or wrong: What were the results of the ISS?

    What’s an ISS? In the drug development/approval process, all the data from human clinical trials on a drug is periodically pooled and the safety data is analyzed. This analysis is called an Integrated Safety Summary (ISS). It is an FDA regulatory requirement and the results are sent to the FDA for review. All that pooled data (sometimes from thousands of patients) makes it more likely that any safety issues with a drug will be found since the large population involved gives more statistical significance to the analysis. This process also continues for years in post-marketing. In any case, rare adverse drug events (side effects) that are linked to the drug may not show up until the drug has been tested in thousands of people or even tens of thousands (once the drug is on the market). If, in the past, an ISS never indicated a problem until this latest study and then the drug was pulled from the market, Merck and the FDA should be in the clear. If, on the other hand, the FDA and/or Merck did see problems from this pooled ISS data analysis from previous studies and didn’t act, then somebody has some serious explaining to do.

    Posted by: on November 19, 2004 10:28 AM

    What I find really scary is that Accenture is now managing new drug trials, under contracts where they don’t get paid unless the project meets success metrics. This is dangerous–there’s tremendous pressure to fudge the data. Should a drug manufacturer cook the data, they’d be out of business, so they have a strong incentive to put in and respect controls. But for Accenture, this is only one minor line of business among many, and if it blows up it’s just a blip on the bottom line.

    (Accenture’s role in drug testing is discussed in the last third of this article):


    “That led Accenture to create scorecards that hold Wyeth scientists accountable for meeting research objectives. The consulting firm also took over the process of managing clinical trial data — the first time a drugmaker has entered into such a deal. The result? Wyeth is now moving 12 drugs into development every year, up from three in the past. The results have “really been phenomenal,” says Robert R. Ruffolo Jr., Wyeth’s research president.”

    Posted by: Ted Feuerbach on November 19, 2004 12:11 PM

    This is scary. With the kind of “Book Cooking” that has gone on in recent years by some of the big accounting/consulting companies I shudder to think about them managing clinical trial data analysis for new drug applications. I only hope that the success metrics are based on the data being processed, not the outcome of the clinical research.

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    Comments Lose Another Reader

    I got a note today from a longtime reader. He wrote of the comments here (and is far from alone in this sentiment):

    “I’ll no longer be reading them.

    “Not your fault, really. But there’s enough that annoys me in the world without it deliberately trying to be offensive.”

    Amen on the last part.


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    Criminal Charge? No Problem if You’re a Republican Leader

  • The Hill: Rule change to shield DeLay. The House GOP caucus is likely to vote today to end its rule requiring leaders to step down if indicted, thus shielding Majority Leader Tom DeLay (R-Texas) in the event that criminal charges are brought against him in a highly controversial case in Texas.

  • Comments

    Posted by: Ted Feuerbach on November 17, 2004 02:14 AM

    Sadly, judging from the last election, it’s what 51% of the American people want.

    Posted by: on November 17, 2004 07:29 AM

    Things that make you go Hmmmmmm

    The Senate Indian Affairs Committee stunned a public hearing by revealing that recent newspaper coverage had inaccurately understated what the committee identified as over $66 million in payments and millions more in political donations, extracted from six Indian tribes by casino lobbyist Jack Abramoff and his secret junior partner Michael Scanlon. The partners shared millions of this loot with former Christian Coalition executive director Ralph Reed, Abramoff’s prot

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    Back to High Speed

    I’ve returned to Hong Kong, where the Net connections are excellent. The difference between here and Shanghai is amazing, in many ways.


    Posted by: on November 16, 2004 04:59 AM

    Don’t let the door hit you in the ass when you leave!

    Posted by: on November 16, 2004 08:01 PM

    Five Rivers versus WalMart

    Did you know that Walmart was dumping TV’s on the market at lower than market prices and that this was possible (partialy) because China has purpously devalued the Yuan (their currency) and held it down artificialy for years? This is a MAJOR cause of job-loss in the United States.

    OK, this is from a friend of mine who sometimes gets out of control, but can someone tell me how legit it is?

    If manufacturing is the baseline of our economy and someone else is doing (manufacturing) more than us, does that mean that they are gaining on us as an economic power in the world? Last quarter trade deficit with China was over $120Billion!

    Posted by: on November 17, 2004 04:20 AM

    It’s only a matter of time before China will be a bigger economy than the US. Current World Bank estimates put the changeover as happening at about 2025; using current GDP and growth rates puts it at more like 2040. But: it will happen sooner or later.

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    Thank You…

    …to the Online News Association for the kind award to this online column. I’m flattered, and honored.


    Posted by: Steve Yelvington on November 16, 2004 10:43 AM

    Nihao, Dan–

    You’ll be amused to know that as your award was announced, the screenshot shown to the crowd was headlined: “Please don’t feed the troll.”

    Posted by: on November 16, 2004 12:00 PM

    Congratulations Dan,

    and thank you for keeping your comments section open to the public

    Posted by: on November 16, 2004 02:20 PM

    Congratulations, Dan.

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    Blogs and International Relations

    Daniel Drezner and Henry Farrell have written a well-reasoned piece in Foreign Affairs about the intersection of grassroots media and international affairs. Summary:

    Every day, millions of online diarists, or “bloggers,” share their opinions with a global audience. Drawing upon the content of the international media and the World Wide Web, they weave together an elaborate network with agenda-setting power on issues ranging from human rights in China to the U.S. occupation of Iraq. What began as a hobby is evolving into a new medium that is changing the landscape for journalists and policymakers alike.


    Posted by: on November 5, 2004 06:31 PM

    This reminds me of Time’s piece with the headline “Hyper-Democracy?” The Internet and now blogging is on its way to destroying Big Media Owners’ monopoly on defining the “normal” scope of political debate — and it’s about damn time!

    Posted by: Ian Wilson on November 5, 2004 07:04 PM

    This is an interesting point and adds a new dynamic to blogging journalists. As a more or less direct analogy, is Dan Rather more influential because he has a large audience in America or is Dan Gillmor more influential because his audience is global and fully interactive (meaning he hears their views as well as “broadcasting” his own)?

    Traditional news media provides the occasional editorial comment within a sea of, essentially, “announcements” whereas blogs offer an number of, essentially, “editorials” and viewpoints with each and every story. We become a more educated reader when we are offered the “why” and “how” in addition to “what, where and when”.

    More and more I am seeing traditional news outlets as providing stale, diluted and often unfiltered “sound bites” straight from the spin masters and PR people. Moving forward can someone like Dan Rather (as an analogy) compete in terms of accuracy and insight with a medium whose readers are potentially a vast army of “on the spot” editor reporters distrubed across the globe?

    Posted by: James Salsman on November 5, 2004 09:10 PM

    I sent this to a bunch of international poison control centers today:


    I have a feeling that sending to the email inboxes of poison control centers’ directors will be more effective than just blogging it.

    Posted by: JamesJayToran on November 6, 2004 10:13 AM

    This is an April Fool’s Joke, right?

    Posted by: brucetct on November 6, 2004 09:20 PM

    blogging has become a social networking kind of tool i assume but it is smaller scale if compare to friendster, flickr or orkut.

    Posted by: Tom Davey on November 7, 2004 01:03 PM


    a slight correction to the post. The Drezner/Farrell piece appears in Foreign Policy magazine, not Foreign Affairs.

    Tom Davey
    Web producer for www.foreignaffairs.org

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    Book Notes

    My publisher tells me that rights have been sold for Japanese, Portuguese and Korean editions of We the Media. Grassroots media in Asia is getting big, and Brazil is a hotbed of blogging and other media work, so I’m naturally pleased to see these thoughts get into their native languages.

    Also, Fortune Magazine’s David Kirkpatrick offered some kind words in his latest column, saying, “If you want to really understand the significance of blogging as a new media alternative,” read the book.


    Posted by: on November 5, 2004 09:30 PM

    Dan, Be careful, you may be the crank that started a revolution.

    Lawrence Lessig, President 2008

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    Big Companies Can Spam? Ask Microsoft

  • Washington Post: Microsoft E-Mail Looks Like Spam to Some Recipients. Like many anti-spam activists, Poortinga, a Bloomington, Ind., programmer, has never been a fan of the Can-Spam Act. He said it is as much an effort to protect corporate marketers’ ability to send unwanted e-mail as it is to block unsavory spam. He said he never gave Microsoft the e-mail address to which Ballmer’s note was sent. Poortinga said he primarily used that address to register Internet domains for hosting Web sites. “It also shows that the Can-Spam Act is simply a worthless exercise in PR and it reinforces the widely held belief that Microsoft is so arrogant that they feel that they are not bound to conform to laws and standards,” Poortinga said in an e-mail interview.

  • Comments

    Posted by: lightning on November 5, 2004 10:59 AM

    The Direct Marketing Association and their furry little friends have this fantasy that there is such a thing as “legitimate” spam. There isn’t — it’s a matter of simple arithmetic. If there are 100,000 busineees worldwide that might want to sell you something, and each of them sent you one e-mail per year, that would be 274 *per day*. Both of those assumptions are wild underestimates, of course.

    Spam is looking less and less like marketing and more like a massive denial- of- service attack. Cyberterrorism, anyone?

    Posted by: on November 5, 2004 12:39 PM

    I agree with Lightning. I get 15-20 Fake Rolex ads a day as well as the other garbage and I have noticed in the last two or three days that some idiot had spoofed my email address and sending spam from me, at least I am getting the bounce messages.

    Posted by: on November 5, 2004 10:37 PM

    Hey Guys

    The Feds have a way for you to, at least, get rid of that spam… well, in a manner of speaking.

    Look here: http://www.ftc.gov/bcp/conline/pubs/online/inbox.htm

    About half-way down that webpage is this:

    “What Can I Do With the Spam in my In-Box?

    “Report it to the Federal Trade Commission. Send a copy of unwanted or deceptive messages to spam@uce.gov. The FTC uses the unsolicited emails stored in this database to pursue law enforcement actions against people who send deceptive spam email.”

    The Feds are asking for the spam you receive. There’s only one way you can make ’em work on it. Send the spam to the FTC.

    Posted by: on November 6, 2004 02:09 PM

    Microsoft has been both a spammer, and spammer-friendly, for a long time.

    Back in the days when inames was giving away free addresses, I got one from them. I never had any use for it, until one day we had a problem at work that required access to some of their tech support databases. Since we didn’t have a net conection at work, I volunteered to do the research at home. The database access required that I cough up an email address, and, being suspicious, I gave them the inames one. Not long after that, I started getting email from MSN Sidewalk vendors offering me cheap DVDs, airfare discounts, etc. And it got worse: apparently, either one of their vendors sold my address, or someone hacked an MS server and stole their database, because the inames address started getting all kinds of crap. I even got a few 419 spams through it.

    One of the very first things MS did when they bought Link Exchange was to amend its TOS to eliminate the provision that banned spammers. This had been a useful way of starving them of free advertising.

    Before they sold out to MS, hotmail had an aggressive policy of closing accounts that were being used as dropboxes to collect replies to spams. MS modified their software to make it impossible to even _complain_ about such abuse by autobouncing any complaint about email that didn’t _originate_ from their servers (To be fair, they appear to have stolen this idea from Yahoo, so it’s not like they actually went out of their way to “innovate” any means of being a spamhaven).

    Like everything else that isn’t tied down (and quite a few things that were), the net is, in Microsoft’s view, just another resource to be ripped off to the extent they can get away with it.

    Posted by: on November 7, 2004 06:59 PM

    “Cyberterrorism, anyone?”

    This is starting to sound pretty tempting: some slimeball (probably a spammer I got busted) put my email address on one of those “FFA” sites, and now every moron who’s ever fallen for one of those “$29.95 bulk emailer software with 50 gazillion opt-in leads!!!!” scams is trying to sell me a copy of it. Hacking a few of those scam sites (so that, say, the “add an address” script sends a few thousand “new sucker signed up” emails to the domain owner’s whois contact for every new entry) might give them a hint…

    Posted by: lowes on November 9, 2004 07:34 PM

    The plot emerges through Carson’s meditative, microsoft elusive fragments, mysteriously isolated couplets, nude excerpts from versified conversations and letters, sears interior monologues and (as Carson’s readers have band come to expect) digressions on matters of classical christina aguilera scholarship. This kind of thing is imitated badly harry potter and often by others, but Carson’s phraseology vacation within poems remains her own: “Rotate the husband dog

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    Election Day

    Old GloryVote.


    Posted by: on November 2, 2004 10:25 AM

    I woke up, compared my “civic duty” to my “conscience” and decided I couldn’t vote for either of the candidates. First time ever I didn’t vote for a presidential candidate.
    Until a party chooses a real leader, a statesman, my voting days are over. I’m not voting for incompetents, opportunists, or clowns anymore.

    Posted by: on November 2, 2004 11:00 AM

    From Jeff Jarvia, via Andrew Sullivan:

    After the election results are in, I promise to:
    : Support the President, even if I didn’t vote for him.
    : Criticize the President, even if I did vote for him.
    : Uphold standards of civilized discourse in blogs and in media while pushing both to be better.
    : Unite as a nation, putting country over party, even as we work together to make America better.

    Posted by: joe on November 4, 2004 05:58 AM

    I’ll agree with Mike. Although I didn’t vote for the president that won, I will support him even though I’m not that happy with him.

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