Ah, rumors. The stuff that makes stocks go up and down. At least juicy rumors keep things interesting.

There is some chatter in the blogosphere emanating from SiliconValleyWatcher that enterprise database vendor, Oracle Corp. (NASDAQ: ORCL) may be in the process of scooping up upstart Salesforce.com (NYSE: CRM). Not only is SVW hearing this from a reliable source but it appears the buyout may come at a very large premium -- 50% over CRM's share price today.

I feel like this tie-up has been telegraphed from the inception of Salesforce.com as an organization. Salesforce.com plays in the SaaS (Software as a Service) space, effectively letting both large and small sales organizations rent the software that manages their sales pipelines.

I've written about SaaS vendors previously and how they harbinge the future of the software industry. Combine a pay-as-you-go model that addresses the long tail of small businesses with the sales prowess of an Oracle at the Fortune 500 level and you have an extremely interesting M&A.

As SiliconValleyWatcher posits, it's going to come down to numbers. Salesforce's effervescent (understatement) CEO, Mark Benioff, came out of Oracle and could play the role of Larry Ellison's successor. Benioff knows he has some great assets and is looking to best capture their value.

Is Oracle going to pay up?

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author holds no position in the stocks mentioned.

Is Oracle putting some major FORCE behind a new acquisition? originally appeared on BloggingStocks on Sun, 10 Feb 2008 15:10:00 EST. Please see our terms for use of feeds.