Larry vs. Larry: Can Page Handle His First Leadership Test?

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Patent battles don't get much more serious than this. A U.S. magistrate has ordered Google (Nasdaq: GOOG  ) chief Larry Page to negotiate directly with Oracle's (Nasdaq: ORCL  ) Larry Ellison to settle a patent dispute relating to the Android operating system. The two are scheduled to meet next Monday at 9 a.m. PT. Further conferences could also take place between Sept. 20 and 30, court filings provided by The Register say.

At issue is Java, the platform and programming technology the database king acquired when it spent $7.4 billion on Sun Microsystems in 2009. Oracle says Android infringes on Java patents originally issued to Sun for the way that it translates Java code before executing it inside a built-in virtual machine.

Google, naturally, disagrees, and no less than Java creator James Gosling sided with the Big G after taking a job there. He's since moved on to become the chief software architect for a start-up called Liquid Robotics.

Not that it would matter if he were still at Google. The company's attempts to make Andy Rubin, its top Android executive, face off against Ellison failed when Oracle complained to the court. So now it's Larry vs. Larry -- the rookie (Page) versus the legend (Ellison), whose reputation for ruthlessness is well known.

Just ask SAP (NYSE: SAP  ) . Even after a judge vacated a $1.3 billion jury award in a years-old case involving ill-gotten revenue derived from a breach of internal Oracle systems, the database king has vowed to fight on. Never mind that the court says Oracle is due $272 million; Ellison and his team want all $1.3 billion.

Meanwhile, Page isn't even a year into his new role as Google CEO. He's been canceling some projects, beefing up others, and in the process aiming squarely for Facebook and other would-be social-media rivals.

I get the sense that Page didn't offer Rubin as Google's representative to insult Oracle -- although it was taken that way. I think he bowed out because (a) he doesn't believe that negotiating with Oracle is a priority, and (b) he'd rather not negotiate with a company known for getting its way.

Perception matters here. Google investors aren't just betting on the business; they're betting on Page and his ability to win while going up against tough competitors such as Apple, Microsoft, and, yes, Oracle. What if Ellison beats him the way he beat SAP? I hope you're prepared, Mr. Page. The outcome of this dispute matters a lot more than you may think.

Do you agree? Disagree? Please weigh in using the comments box below. You can also keep tabs on these tech titans by adding them to your Foolish watchlist:

Fool contributorTim Beyers is a member of theMotley Fool Rule Breakers stock-picking team. He owned shares of Apple, Google, and Oracle at the time of publication. Check out Tim'sportfolio holdings andFoolish writings, or connect with him onGoogle+ or Twitter, where he goes by@milehighfool. You can also get his insightsdelivered directly to your RSS reader.

The Motley Fool owns shares of Microsoft, Oracle, Apple, and Google.Motley Fool newsletter services have recommended buying shares of Google, Microsoft, and Apple and creating bull call spread positions in Microsoft and Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy.

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  • Report this Comment On September 14, 2011, at 11:30 AM, mrluc wrote:

    Page has truth on his side.

    As any of your programmer friends will tell you, Oracle has been trying to convince the judge that anyone who implements a Java API is actually stealing their intellectual property.

    An API?? That's insanity. An API is not copyrightable. An API is an Application Programming INTERFACE. If the code of a program is an architectural blueprint (and copyrightable), its API is a description of what doors Fedex can deliver to (and not copyrightable). APIs are the basis of interoperability, and as such an essential component of the tech economy.

    With that out of the way, there's only a matter of a truly tiny, insignificant little fly-in-the-ointment: the direct copying of Java code in less than 20 source code files, of the thousands in the Java implementation. Some developer got lazy and copied some simple method functions from the non-secret, but copyrighted, Java implementation.

    Were a judge to intervene here, he would likely assess one-time punitive damages against Google that the company can easily afford.

    This is not a big issue for Google.

    Ellison, on the other hand, is struggling. Large deployments of "NoSQL" frameworks are becoming common. Witness the open-source Cassandra at Facebook, BigTable at Amazon, Google's search-friendly custom filesystem, and a host of small-to-midsize-friendly and free options like Riak, CouchDB and MongoDB are available for new companies or new products within existing companies.

    Oracle's database earnings in corporate america is a key driver of its revenue. Java, the language of corporate america, was the reason they bought Sun.

    But traditional corporate America, and traditional IT deployments, are not a growth industry. Oracle's massive, almost unimaginably expensive software licenses are going away of the dodo.

    In large enough companies, there can be a role for Oracle's database software, but if you want to see the future, ask yourself: how many of the new players are building their businesses around Oracle products?

    Page negotiates from a position of extreme strength. Ellison may manage to extract a large one-time payment, but certainly no more than that.

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