SANTA CLARA, CA: Sun Microsystems reported its growth in net income for the second quarter, simultaneously with its acquisition of iconic Swedish open-source software company, MySQL, for $1 billion.
The company reported earnings of $260 million compared to $133 million the year before, as well as a rise in revenues to $3.62 billion, and buttressed this news with the acquisition announcement.
The software behind Facebook, Google, Nokia, and other notable companies, MySQL is a company familiar to the open-source community.
“Our number one [target] was the open-source [community],” said Karen Kahn, VP of global communications for Sun Microsystems. “It was important that they understood that we have enormous belief in this brand and didn't acquire it to detract from [it], but to invest in it.”
Sun Microsystems also reached out to other audiences, such as investors, employees, and the media (particularly bloggers). However, the acquisition was material information that had to be kept quiet until a formal announcement could be made to everyone.
An early morning plan was hatched that would adhere to government regulation but, Sun hoped, would get out the proper message. In addition, the company, which is based in California, wanted to strategically make the announcement along with their earnings in time for the opening bell for that day's stock market activity.
“These are funny times for the stock market,” said Kahn. “We had two hours to drive analysts and media to the conference call. Every second mattered.”
Work started at 5 am of January 16. Fortuitously, all of the MySQL employees were in one room for a first-ever employee conference in Orlando, FL. (MySQL now has dual headquarters in Sweden and California. They had been planning an IPO, but decided on the acquisition instead.)
The news went out on the wires at 5am Pacific time, when MySQL CEO Marten Mikos took to the stage in Florida to speak. Fifteen minutes later, Sun CEO Jonathan Schwartz spoke to employees via satellite.
Meanwhile, at 5:05 am, Sun sent an e-mail to all of its 34,000 employees around the globe. Within 30 minutes, Sun executives were briefed and prepared to address any incoming questions.
Schwartz also blogged about the announcement that morning, and received 80,000 hits in four hours. By the afternoon, a video featuring Sikos, Schwartz, and Sun's VP of software, Rich Green, was also posted online.
The fact that government regulation swore Sun to secrecy added a challenge to an already complex announcement. One day after the announcement, The New York Times' Kevin O'Brien wrote: “Open source supporters said Sun's purchase of MySQL lends further credibility to the business model, which is competing with the software and systems sold by companies like Microsoft and International Business Machines.”
“It's about putting $1 billion behind this [open-source] community,” says Kahn. “You don't want to catch anyone by surprise, but we had to in this case.”