Why is Oracle fighting so hard for Sun's MySQL?

By Jim Finkle - Analysis

BOSTON (Reuters) - Oracle Corp (ORCL.O) has allowed regulatory approval of its $7 billion acquisition of Sun Microsystems Inc (JAVA.O) to drag on for months due to controversy over a database that most users get for free.

Sun's MySQL database, while minuscule in revenue terms, is important to Oracle because it can help the company expand into new markets and improve its competitive edge against arch-rival Microsoft Corp (MSFT.O), analysts say.

MySQL's customer base comprises small- and mid-sized companies that use its technology to run websites and store business data. Oracle's database has traditionally been weak in these markets, focused instead on large corporations.

"Oracle's install base represents the Old World -- the existing enterprise application space. There is a whole New World that Oracle hasn't been able to capture," said Marten Mickos, a former chief executive of MySQL.

MySQL is one of several assets that Oracle will gain with its acquisition of Sun, but it is the only one that antitrust regulators have singled out for scrutiny.

While U.S. authorities have approved the deal, European Union antitrust regulators issued a statement of objections on Monday, saying it would hurt competition in the $19 billion-a-year database market if No. 1 player Oracle gained control of MySQL.

Such concerns have held up the Sun deal for months and resulted in what Oracle CEO Larry Ellison has said are hundreds of millions of dollars in related losses.

Oracle has refused to compromise on MySQL, an asset that analysts say will help the world's No. 2 business software maker expand into new markets. Google (GOOG.O), Amazon (AMZN.O), Facebook and several travel agents are among the Web giants that use MySQL to run their websites, a market Oracle has had a tough time cracking.