The company's financial performance has been uneven for the past several years, and lately it has struggled to increase sales or turn a profit. It has now posted losses for four of the past five quarters and its revenue has declined each time.

Sun counts several financial services companies among its largest customers and thus was hit earlier than most by the current recession. It had reportedly been seeking a buyer for several months until Oracle stepped in on April 20 and said it would buy the company. Prior to that it was said to have been close to a deal with IBM, but the talks broke down over price and possibly other terms.

Oracle was seen by some as an unlikely savior given its focus on software, and the deal raises questions about what Oracle plans to do with Sun's hardware business after the deal closes this summer. Some analysts expect Oracle to try to sell off Sun's server and chip businesses, while others say it could use them to build more high-end database appliances, along the lines of the Oracle Database Machine it designed with Hewlett-Packard last year.

Oracle has said it was most interested in Sun's Java and Solaris businesses. It also says it will act quickly to make Sun's businesses profitable, which analysts say could mean cutting as many as 10,000 jobs.