Oracle Reveals Role as Microsoft Snoop

Oracle Corp. (Nasdaq NM: ORCL) admitted Tuesday to hiring a detective firm to investigate groups that came out in public support of Microsoft Corp. (Nasdaq NM: MSFT) during its antitrust battle with the U.S. government.

The admission, released in a prepared statement by the world’s second-largest software firm, confirmed that the company hired Investigation Group International to probe the Independent Institute (II), National Taxpayers Union (NTU) and the Association for Competitive Technology (ACT).

The announcement follows last week’s media reports that janitors at the ACT were offered bribes by the investigators to let them go through the company trash cans.

The Independent Institute and another pro-Microsoft group, Citizens for a Sound Economy, have reported stolen laptops that contained documents which later appeared in the press. Oracle, which said it insisted the hired investigators not use illegal tactics, denied involvement in either incident.

New York Times Protects Source

The three targets of Oracle’s investigation publicly portrayed themselves as independent, but their ties with Microsoft eventually came out in the press.

Oracle said it hired the firm to investigate the Independent Institute after it placed ads in national newspapers, including the New York Times, in support of Microsoft. The Times later reported that Microsoft had paid for the ads. In the article, the paper cited internal company documents that came from a Microsoft adversary in the computer industry who refused to be identified.

In a Times story Wednesday, a spokesperson for the paper reiterated its policy of not revealing sources.

Wall Street Journal Denies ‘Improper Activity’

In another incident, the Taxpayers Union publicly blamed the antitrust suit against Microsoft for causing a loss of value in state pension funds. The Wall Street Journal later reported the group had received funding from Microsoft. The Journal said its source was a person familiar with the group’s corporate fundraising.

“We take it there has been no suggestion of any improper activity by The Journal, or any knowledge by the Journal of any such activity by any of its sources, and we know of none,” Wall Street Journal spokesperson Richard Tofel told the Times in Wednesday’s article.

The Journal reported Wednesday that Oracle hired a public relations firm to distribute potentially damaging information concerning Microsoft.

Bitter Feud

The disclosures highlight the bitter feud between two of the world’s largest companies, led by two of the world’s richest men. Microsoft co-founder Bill Gates and Oracle’s Lawrence Ellison have had an ongoing war of words for several years.

Ellison has been a frequent and vocal critic of Microsoft’s business practices.

In its statement, Oracle defended its year-long effort to expose the relationship between Microsoft and the groups that supported it.

“Oracle discovered that both the Independent Institute and the National Taxpayers Union were misrepresenting themselves as independent advocacy groups when in fact their work was funded by Microsoft for the express purpose of influencing public opinion in favor of Microsoft during its antitrust trial,” the statement said.

‘Proof’ of Conspiracy

Microsoft said that Oracle’s disclosure is “proof” that a concerted effort by Microsoft competitors has influenced the government in its antitrust lawsuit.

“This is dramatic proof that Microsoft competitors have been funding and orchestrating a massive PR and lobby campaign against Microsoft in an effort to unfairly tarnish the company’s image and generate government intervention in a competitive and healthy industry,” Microsoft spokesperson Mark Murray said. “It’s a sad day and an embarrassment for Oracle and all its employees. I think Oracle has lost a lot of credibility today.”