PeopleSoft (NASDAQ:PSFT) is under siege. Oracle's (NASDAQ:ORCL) takeover strategy seems to have shifted from an outright attack to starving the company out. The hostile takeover attempt is dragging on (and on, and on). And it's costing PeopleSoft a lot of money in sales and in defense expenses. In fact, so far defending itself has eaten up $55 million, or $0.10 a share, since June of last year. As for the toll on sales, look no further than yesterday's earnings report.

The company had net earnings in the first quarter of $24.2 million, or $0.07 a share, compared with $38.5 million, or $0.12, a year earlier. Revenue, however, climbed to $643.1 million, compared with $460.3 million a year earlier.

But those results are clouded by onetime adjustments related to the acquisition of J.D. Edwards and the additional revenue from that company. It's difficult to tell exactly how the core PeopleSoft products are doing. The company did report license revenue of $131 million in the quarter, which was at the low end of analyst expectations of $130 million to $140 million. Still, that was well above the $81 million it took in a year earlier, but again the results now include revenue from J.D. Edwards.

No doubt, though, the ongoing uncertainty is affecting PeopleSoft's customers' (and potential customers') purchasing decisions. If you're a business decision maker, would you want to make a massive investment in converting critical software to PeopleSoft, with all that is going on? You would likely be concerned about what's in store for the product if the Oracle takeover goes through. Will the company continue to support existing PeopleSoft products with new features and upgrades? If not, then will you have to spend again to convert to yet another product?

Those kinds of questions are likely to have such high-dollar decisions on hold. And that's not good for sales.

The stock is beaten down to around $18 a share from a 52-week high of $24.04. Further, the company said that second-quarter earnings are likely to be below analysts' expectations of $0.22 per share.

But, Oracle goes to trial in June to determine whether the takeover would be anticompetitive. Regardless of whether that succeeds or not, PeopleSoft's stock is likely to go up. If Oracle wins, it would pay $26 per share for the company, and if it loses, then PeopleSoft likely has a lot of pent-up demand for its products.

Is Oracle behaving badly, or would the purchase of PeopleSoft make sense? Share your opinions on the Fool's Oracle discussion board.

Fool contributor Mark Mahorney doesn't own shares of any companies mentioned.