Economic Worries Propel Silicon Valley Deals

Recent acquisitions by Sun Microsystems and Oracle could be the opening round of new Silicon Valley deal-making, the Wall Street Journal reports, as tech companies worried about a US economic slowdown seek to strengthen their positions. Smaller companies struggling to stay afloat are tempting targets; bigger fish also want to invest in building web-based software and services—a still-growing sector.

Oracle, in buying BEA, expands its business to compete better with IBM in the middleware market. Sun, which generally is focused on hardware, is using its purchase of MySQL as a relatively safe foray into the software market. "We have seen no cessation of interest in the Internet among consumers and businesses looking for cost reductions and efficiency," Sun's CEO said. (More Sun Microsystems stories.)