On Thursday, The Wall Street Journal reported that Oracle (Nasdaq: ORCL) is contemplating a bid for data-storage specialist EMC (NYSE: EMC), whose shares rose by 5% for the week.

Apparently, nothing surprises investors when it comes to Oracle CEO Larry Ellison. But is this really a legitimate rumor? Oracle has been an aggressive acquirer, sure, but Ellison has a history of using cash for deals. On that basis, he can't afford EMC.

Oracle had $23.6 billion in cash and short-term investments versus $17 billion in debt as of the end of August. Any bid for EMC would have to include a big chunk of new Oracle stock. As a current shareholder, I'm not so sure I'd like that.

Filling a product need?
Yet there are legitimate reasons for Oracle and EMC to be talking. Data storage and analysis is essential for tech infrastructure. That's why Hewlett-Packard (NYSE: HPQ) bid big for 3PAR when it was still under the direction current Oracle co-president Mark Hurd. It's also the reason IBM (NYSE: IBM) spent $1.7 billion to acquire Netezza.

The difference here is that 3PAR and Netezza serve distinct segments of the storage market. EMC, meanwhile, is the heavy, a disk manufacturer that also develops and sells software. The company owns 80% of VMware (NYSE: VMW), too.

What makes this combination interesting is the Oracle products that President Mark Hurd is charged with selling: the Exadata database machine and the Exalogic server, which Ellison has referred to as "cloud computing in a box."

Both look like cabinets filled with server technology acquired from Sun Microsystems. But they also have a need for storage capacity (i.e., Exadata), and virtualization software (i.e., Exalogic), two things EMC specializes in.

I'm still unconvinced that there's enough of a technical and financial fit between these two, but when it comes to Ellison's acquisition strategy, I've been wrong before.

Now it's your turn to weigh in. Should Oracle buy EMC? Please vote in the poll below and then leave a comment to explain your thinking. To get the latest news on EMC, add it to My Watchlist.

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Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He owned shares of IBM and Oracle at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. The Motley Fool owns shares of IBM and Oracle and is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is watching the leaves turn. Slowly.