This proves nothing really - locker room gossip is generally driven by net rumors, and you're merely witness to an interaction that confirms your own belief - If you cared to look at the actual referring URL closely - http://nwk-mail1.sfbay.sun.com/frame.html?rtfPossible=true&lang=en

You will see that it is not the subject that is 'Possibly True' but a flag 'rtfPossible=true' - it is intellectually dishonest of you to believe that this flag is the subject. Email subjects are not exposed in referrer URLs, IMHO.

The rumor may come true, sooner or later, and then you can do another post "I told you so", but this post is vacuous and tenuous in it's argument

On re-reading, I might have come across as more strongly than I intended, and merely wished to indicate your interpretation of the 'title' of the email is not valid - my apologies for any stronger connotations.

There is another problem with the facts. Instead of relying on some "anonymous source," why not just check the SEC's site ? He excercised options and immediately sold the stock. There was no sale-and-buyback

This is beside the main point, that it would make no business sense for Google to buy Sun. The Google shareholders would freak out and dump the stock. GOOG shares would be instantly cut in half. What a disaster !

I gotta agree with Aaman:
You post speculation that the hottest tech company in the world is buying Sun -> Sun employees read your speculations.

Proving that employees are interested in their fate; nothing more.

(I'm not in any way affiliated w/ Google or Sun. I just care about truth and logic.)

Aaman:

I had the same thoughts and I've had this checked into by technical experts and the evidence overwhelmingly seems to point to the fact this is an e-mail, not a link. But thanks for flagging this one up.

Clark: the option-part of the option buybacks-trade is not listed in the same way ... it was a buyback (I'll try to get the numbers for you over the next few days). This was not a straight sell. In fact, I can't believe I hadn't thought about it first time round as a possibility, since just as I said, what was so bemusing was the fact that SUNW stock hardly budged an inch on the sale.

"This is beside the main point, that it would make no business sense for Google to buy Sun. The Google shareholders would freak out and dump the stock. GOOG shares would be instantly cut in half. What a disaster !"

Unless of course Google's stock was already in deline, which it is. What would you rather have, a $50 billion company that's purely Google, or a $50 billion company that is Google and Sun? This is the real decision execs are facing right now - what the would be using is a concept known as "arbitrary leverage" - using today's price highs to capitalise on a bigger outcome in the future when they know valuation is in decline. It's the way all the dotcom's that are still in business today weathered the storm of the early millennium. Look at it like that, and it makes total sense.

on top of this, Goog have very positive earnings but they are all 'pure play' - that is, attached to one market niche, i.e. ad's. Even Goog execs themselves admitted as much that this is a long term threat in the leaked powerpoint presentation, however, it also stated that earnings are solid for at least 2006 (which covers 2007 by implication). In other words, short term they can swallow Sun's negative earnings (which are on the increase) and capitaise on this growth to see their own balance sheet through into the future. A Sun t/o is totally consistent with Google's current strategy.

Nathaniel:

"... employees are interested in their fate; nothing more."

Fair point, but I find what stands now at about over 500 Sun hits a little peculiar if this is just myth - I'm even getting repeat visits from Sun servers. This is being bandied about the company, basically ... it says something. Myth tends to be dismissed and forgotten immediately, even if it's good.

I tell you what - thanks for all the initial interest: just tell me what you guys DO want to hear and I'll research it then and put it up here.

An interview or inside info from a Sun exec would top the opinion, and turn it to news

OK, fair suggestion Aaman, let me see what I can do.

If you don't get answers from Sun exec, it will be interesting.

I think big foot might be holding Schwartz hostage. If this is not true then I'm sure we'll get an email from big foot. In anycase Apple hasn't said anything about this story either, it sounds like they might merge with Sun and Google

Pure speculation.

Scott McNealy only pays himself a tiny salary each year, so typically funds himself (and his GMC-lovin family) via share and option sales. It's similar to Steve Job's situtation at Apple down the road in Cupertino.

Google will NOT buy Sun - it's a poor fit for them, The genuine big things that are happening at Sun are:
1) Sexy new storage systems for media companies
2) Bigger Galaxy servers from Andy B
3) Niagara chips to run Linux very soon
4) Lehman (CFO) will cut costs and turn a profit

I hold a few SUNW shares.

SUN employees probably have no idea wether the company is being bought or not, but as it effects their jobs they are likely to be interested.

I can't say much for your technical experts then! As Aaman says, the 'rtfPossible=true' is obviously a flag - simply indication that Rich Text Format (RTF) is possible - perhaps meaning the recipient can cope with it.

And why wouldn't SUN employees email the url to you blog around - I'm sure they're at least as interested in unfounded speculation about their company as everyone else - probably a lot more so.

As others have said, why would google buy a niche hardware company so deep in the red?

Wouldn't "rtfPossible" be referring to Rich Text Format?

Isn't rtf a Microsoft format? Funny that:)

Oh, this is just silly. Of *course* that rumor got lots of people from Sun reading it. What do you *think* would happen?

Schwartz hasn't replied because he hasn't stopped laughing yet.

Here's a copy of an email a friend of mine who works for Sun sent me...apparently this is an internal chain letter floating around that he cc'd to me.

To: originalgeek@{obfuscated}.com
From: {obfuscated}@sun.com
Subject: Looks like easy days ahead for us =) lol

Apparently since Scott sold some of his stock to generate some capital to exercise more of his stock options, we are now going to be bought out by Google. At least according to this section of the blogoshpere:



Have a look and a good laugh. And give me some of what that guy has been smokin'.

Didn't this entire rumor originate from someone mis-reading a headline about Google switching their servers from Windows NT machines to Sun machines?

Dave

I would have to disagree with the idea that Sun would not be a good fit for Google.

Do you have any idea how many servers Google stands up every month? I don't, but I'm sure it's a pretty big number. Plus, the latest news that Google is gunning to be everyone's storage provider. The savings on hardware alone is a pretty big benefit.

Then there's StarOffice and Java.

Makes sense. Google will be switching over to Opteron systems. Sun has all those new, sweet Opteron servers. There's at least a major partner ship in the works.

"the option-part of the option buybacks-trade is not listed in the same way ... it was a buyback"

That is just plain wrong. The SEC page shows three things :

1) At the bottom - options exercise of 2.4 M shares. This was NOT a buyback. The number, 2,400,000 is clearly in the D (disposed) column.

2) At the top, the first row, the 2,400,000 options are converted to shares.

3) Listed below the converted shares are the individual sales of all 2,400,000 shares of the converted stock.

It's not surprising that the stock did not move on the day of the sale. Sun regularly trades 50 M+ shares per day. 2 million is not much in comparison.


"Unless of course Google's stock was already in deline, which it is. What would you rather have, a $50 billion company that's purely Google, or a $50 billion company that is Google and Sun? This is the real decision execs are facing right now - what the would be using is a concept known as "arbitrary leverage" - using today's price highs to capitalise on a bigger outcome in the future when they know valuation is in decline. It's the way all the dotcom's that are still in business today weathered the storm of the early millennium. Look at it like that, and it makes total sense."


So you think Google is going to $ 160 / share on it's own ? That would give Google a forward P/E of about 15. Ain't gonna happen, unless they buy Sun. Remember the AOL-TimeWarner merger? That was a disaster, and so would this be. If they were going to spend their "arbitrary leverage" why would they not buy a fast growing company instead of a shrinking company like Sun ? It would kill their growth rate and their margins.

I would probably classify this as a some kind of covert, intentional pr booster perpetrated by Google because of their flagging stock price. What better way to generate new interest in Google than to "accidentally" send out "inside" information. The title of the article should be "Google Wags the Dog". If they are such high-tech, big-brained, nerds over at Google, why do they keep making the same "inside information" leak mistakes. I know why...because it's on purpose.

Clark:

"So you think Google is going to $ 160 / share on it's own ? That would give Google a forward P/E of about 15."

Well, given Microsoft's P/E of 20, and the fact that that is a completely who owns the global software market, I think it may well happen.

Come to think about it, there could be something to this. Seed money for Google came from a Sun Founder. Sun has always been behind the idea of web based software (word processing etc). Sun has the StarOffice suite. Google last week buys web based word processing platform Writely. Google could probably create an entire On Line package and no cost to the user to compete with Mr. Softie. Sun makes servers, but it is also a storage company (after acquiring StorageTek. How would this fit into Google. Google talks about infinite storage and the rumors are about the release of Gdrive.

The article itself seems a little self-serving. I put this information out and I'm getting server hits from Sun.

Put some information out about IBM and I bet you get a lot of hits from IBM servers. True? No, it's post hoc ergo propter hoc.

While the deal seems interesting, and there could be truth to it, I find the ego-centric writing style kind of pathetic.

Sun has periodically over the years bought it's own stock back when the price is low. This may help push up the price of the stock and is also used to give out stock to its employees.

I must say that I've read your previous entries on this subject and I still cannot imagine why Google would want to buy this vendor. I do not see how owning Sun would be an asset for Google that it couldn't (if it hasn't already) gone out and build their selves cheaper.

If Google was interested in a particular piece of technology that Sun owns, it would make more sense to go after just that piece. Sun has a lot of baggage which I am sure is not going to be useful to Google.

Have you noticed that SUNW stock always goes up when the European Union gets testy with Microsoft, as they are doing now? That alone may explain the surge in SUNW stock price.

If Google needs servers, why doesn't it just buy servers? It doesn't need to buy a worn-out company. If it needs developers, it can rent them from any number of India-based systems integration firms for [less than] $70/hour.

And, if McNeeley is manipulating the stock price in this regulatory environment he is more nuts than I've been led to believe.

Yes, I own a few shares of SUNW and I thank you all for driving up the price before I sell it.

Someone clicks an e-mail link and you have evidence of a buyout?

I hope you aren't holding or associated with SUN stock, SEC will not be kind. Remember Martha?

it is clear that Goog will buy Sun, go and do a few search on the net, take 5 minutes to mesh all the news and it's clear. For those who don't understand that, please go back to school!!!