“I understand the European Union has a job to do, but the longer this takes, the more money Sun is going to lose and that’s not good. We want to get it done to save as many jobs as we can.”

– Oracle CEO Larry Ellison

The end of Sun Microsystems as an independent company after 27 years is to be prefaced with a bloodletting. And a big one too. The company is sacking some 3,000 employees as it awaits the closing of Oracle’s (ORCL) planned $7.4 billion takeover.

That’s about 10 percent of its workforce.

The cuts, which were disclosed in a regulatory filing today, are to occur in all markets in which Sun (JAVA) has a presence and will be completed over the next 12 months. Sun expects to incur cash severance and other charges of $75 million to $125 million over the next several quarters as a result.

Seems Oracle CEO Larry Ellison wasn’t kidding when he said further delays in approving his company’s deal to buy Sun would cost more people their jobs.

Ugly news for Sun, which has already made sweeping job cuts over the past year, releasing some 6,000 employees into the wild since last November.

Oracle and Sun have not yet responded to requests for comment.

UPDATE: Oracle has declined to comment on the layoffs at Sun.

People familiar with the matter tell The Wall Street Journal and Bloomberg that Brocade (BRCD) is seeking a buyer and that both Hewlett-Packard (HPQ) and Oracle (ORCL) are among its potential suitors. No deal is imminent, but rumor that one might be coming was enough to spike Brocade’s shares some 15 percent.

It’s easy to see why Oracle and HP–and IBM (IBM) as well–might be interested in Brocade. The company’s portfolio of data-networking products and services would do much to help HP take on Cisco (CSCO). It would also give Oracle its own line of networking gear, fulfilling CEO Larry Ellison’s dream of offering customers complete systems as T.J. Watson’s IBM once did.

That said, there are issues with both scenarios. As Oppenheimer & Co. analyst Ittai Kidron explained in a research note this morning, an acquisition by Oracle would require the company to really commit to hardware as a long-term growth plan. “If the company truly plans to become a systems company (one-stop shop software/hardware), then Brocade would be a nice fit, especially including Sun Microsystems with no overlap,” Kidron said, adding, “we’re a bit in the dark on strategy here.”

And what of HP? That’s potentially far more problematic, what with equipment overlap and revenue implications. “Brocade would add the missing data center switch architecture as well as a strong presence in the SAN switch market,” Kidron explained. “That said, there would be massive overlap with HP’s ProCurve networking unit, which we believe would be disruptive. Also, IBM and EMC are 10% customers for Brocade and could be lost as customers (along with HP’s 10% business of Brocade).”

So will Brocade be tech’s next big buyout?

At Hewlett-Packard.

Quite a coup for HP (HPQ), which clearly hopes Seidl brings a bunch of Sun (JAVA) resellers and customers along with him. And quite a blow for Sun, which is seeing customer loyalty tested to the extreme thanks to the company’s planned takeover by Oracle (ORCL).

“Customers and partners alike, especially those grappling with the uncertainty of Sun’s future, need a technology partner that can eliminate barriers to business growth quickly,” Dave Donatelli, executive vice president of enterprise servers and networking at HP, said in a gloating statement. “We anticipate that Randy’s knowledge of the real business issues faced by today’s CIOs, coupled with his high level of energy, passion for technology and a strong network of channel relationships, will expand HP’s success.”

“No, we’re not going to spin [MySQL] off,” Oracle CEO Larry Ellison told attendees of a Churchill Club event in Silicon Valley Monday evening. “We are keeping everything. We’re keeping tape. We’re keeping storage. We’re keeping x86 and SPARC. And we’re going to increase investment in all of them.”

In other words, technologists worried about Oracle’s (ORCL) intentions for MySQL and other Sun (JAVA) systems need to relax.

“Sun has fantastic technology. We think it’s got great microprocessor technology–it needs a little more investment, but we think it can be extremely competitive. It’s got the leading tape archival systems. We think the Open Storage on their new disk system is absolutely fantastic. Java speaks for itself. Solaris is overwhelmingly the best open-systems operating system on the planet….Sun has been a national treasure for the last couple of decades.”

At a special meeting Thursday, a 62 percent majority of Sun’s common stock owners–not including CEO Jonathan Schwartz and board chairman and co-founder Scott McNealy, who, oddly, did not attend–approved the deal, which calls for Oracle (ORCL) to acquire Sun (JAVA) for $9.50 per share in cash, a total of $7.4 billion.

The vote was quick and painless, I’m told. It began at 10:02 am PDT and closed at 10:05 am. The end of Sun’s 27-year history was decided in under five minutes.

Of course, the merger still faces antitrust scrutiny, but Oracle insists it will be completed by the end of the summer. Oracle is probably right. And with ownership of Sun’s Java programming language and the Solaris operating system, Oracle will be a systems and software powerhouse capable of taking Microsoft (MSFT), Hewlett-Packard (HPQ) and IBM (IBM) to the mat.

[Image credit: Ars Technica]

Almost, but not quite.

The 30-day review period for the $7.4 billion deal was set to expire midnight Friday. But instead of approving it, the DOJ extended its examination, issuing a second request for more information. Seems the government has some questions about Java and the way in which it is licensed.

In a statement released late Friday, Daniel Wall, a lawyer at Latham & Watkin, the firm representing Oracle, said that “we were almost able to resolve everything before the Second Request deadline. All that’s left is one narrow issue about the way rights to Java are licensed that is never going to get in the way of the deal.”

Never going to get in the way of the deal?

Well, it already has, hasn’t it? And while Oracle insists the extension of the investigation won’t delay the closing of the deal this summer, this additional 11th-hour scrutiny of Java isn’t exactly encouraging. After all, Oracle CEO Larry Ellison has said that Java is “the single most important software asset we have ever acquired.”

Java has a new evangelist: Oracle CEO Larry Ellison.

In his first public comments since announcing the Oracle (ORCL) acquisition of Sun Microsystems (JAVA) in April, Ellison told attendees of Sun’s annual JavaOne conference that he plans to continue promoting it.

“[Oracle] has invested more than anybody else in Java technology in terms of dollars over the years, and we intend to invest–and accelerate our investments–going forward,” he said, responding to concerns that this, the 14th JavaOne conference, might be Sun’s last. “I don’t expect a lot of changes, just expanded investment and a lot of enthusiasm coming from Oracle.”

Enthusiasm, indeed. Ellison clearly has big expectations for Java which he sees being used in consumer products such as netbooks or mobile devices. “I’m reading a lot in the newspaper about devices based on Java that are Android devices, which is very exciting,” he said. “And there are going to be net-netbooks based on Android. And I think … we can see lots and lots of Java devices, some coming from our friends at Google. But I don’t see why some of those devices shouldn’t come from Sun-Oracle. … So I think you’ll see us get very aggressive with Java and developing Java apps for things like telephones … and netbooks. There will be [computers and devices] fundamentally based on Java and JavaFX not only from Google, but also from Sun.”

Seems that Ellison, who a decade ago bloviated endlessly about “thin-client” computers only to see that market falter and fail to take off, is circling back to take another run at it, this time with netbooks.

[Note: The post below was updated 06.03.09 with quotes from the raw transcript of the interview]

It’s not clear what activities are at issue here, but if they’re found to be in violation of the FCPA, Sun (JAVA) could be in a for a rough time of it. As the company itself notes, “The FCPA and related statutes and regulations provide for potential monetary penalties, criminal sanctions and in some cases debarment from doing business with the U.S. federal government in connection with FCPA violations, any of which could have a material effect on our business.”

Also disclosed in the filing: three class action suits seeking to block Oracle’s $7.4 billion acquisition of the company. “Three putative shareholder class action were filed by individual shareholders on April 20, 2009, April 30, 2009 and April 30, 2009, respectively, in Santa Clara County Superior Court naming Sun and certain of our officers and directors, as well as Oracle Corporation, as defendants,” Sun explains. “The complaints, which are similar, seek to enjoin the proposed acquisition of Sun by Oracle Corporation and allege claims for breach of fiduciary against the individual defendants and for aiding and abetting a breach of fiduciary duty against the corporate defendants. The complaints generally allege that the consideration offered in the proposed transaction is unfair and inadequate. Sun and the other defendants have not yet responded to the complaints.”

Wonder what Oracle (ORCL) will make of all this?

And that may well be the case. IBM (IBM) was reportedly offering $9.40 a share for Sun (JAVA), nearly double Sun’s share price before investors caught wind of talks between the two companies. Seems a good price for Sun given its current situation. Certainly, there are no other offers on the horizon. Nor are there likely to be. “Others have already passed over Sun–given that, we’re unsure who would step up to the plate,” Edward Jones analyst Bill Kreher told Bloomberg. “We are unsure if the company can execute a successful turnaround on its own. Their future is very uncertain.” Toni Sacconaghi, an analyst with Sanford C. Bernstein, agreed. “A collapse in the talks has considerably weakened Sun’s hand, as we see no other likely suitors,” he said in a research note.

If that’s the case and discussions with IBM are truly finished–and there’s a chance that they might not be–Sun could be left facing some unpleasant options. “Sun will have to take alternatives by either splitting up or downsizing,” said George Weiss, a Sun analyst at Gartner. “Sun still has several options, since there are parts of the company that could bring value to one or several companies on the market. But those companies probably won’t want to acquire Sun as an entire entity.”

Welcome once more to Weekend Update! I’ll be filling in today for your regular host, Beth Callaghan, who’s on vacation.

And what sane person wouldn’t be, after the slew of Silicon Valley silliness inspired by April Fools Day this past week? Digital pranks were the name of the game as Google (GOOG) and others heaped so many tepid hoaxes upon us that we wanted to call April Fold so as to quickly end this round of gags.

But no bag of tricks was needed for one Web site to April Fool itself into crying wolf about an imminent Google (GOOG) acquisition of Twitter, when a real story around the corner was aboutGoogle turning Turbo Tax tweets into ads.

Meanwhile, one of the biggest jokesters of them all, The Onion, won one of the biggest awards in journalism, a Peabody, meaning that the best sense of humor goes to that panel of judges. And to Stephen Colbert, who was willing to entertain (for a while) Twitter spokesmodel Biz Stone’s biz-model-less thoughts in an interview on “The Colbert Report.” Also on BoomTown this week: Facebook’s former CFO Gideon Yu is out, as was a leaked memo from Mark Zuckerberg about Yu’s departure and the company’s situation.

A sense of humor is certainly an invaluable feather to have in your cap these days. Digital Daily wrote about the most recent doom-and-gloom predictions and events to happen in this econalypse, like analysts’ predictions of YouTube losing $470 million in 2009, the barren IPO-less wasteland VCs are bemoaning and a major global slump in semiconductor sales. Other headlines weren’t quite so dreary: Google’s foray into VC land, the folks at BlackBerry HQ celebrating surprisingly good fourth-quarter results and the world’s worst-kept secret, the anticipated merger between IBM (IBM) and Sun (JAVA).

There was a similar mix of dark clouds and silver linings over at MediaMemo. The National Collegiate Athletics Association forced Twitter and partners AT&T (T) and Federated Media to take down one of its first ad campaigns, “March Tweetness,” crying copyright foul. Also running afoul with big companies in legal waters, free music Web site Seeqpod filed for bankruptcy. And video site Veoh laid off a significant amount of staff and kicked out its old CEO, replacing him with founder Dmitry Shapiro and refocusing the company on its “Video Compass” browser plug-in.

Online video is generally a turbulent space these, but the waiting is the hardest part for Hulu when it comes to the rumored Disney deal in which Disney (DIS) seems to be playing the field. Other gems of the week were URL-shrinking Web service bit.ly’s raising of $2 million and media mogul Rupert Murdoch’s Kindle envy.

In a new Mossblog, Walt Mossberg gives us his first impressions of the BlackBerry App World store in which Research in Motion (RIMM) takes a bold step into what was formerly the sole domain of Apple (AAPL). In Personal Technology, Walt reviews a network hard drive from Western Digital (WDC) that makes the technology gloriously simple for everyone. And in Mossberg Solution, Katherine Boehret takes a look at several laptop trays, designed to protect the–ahem–family jewels and family members in general from laptops’ scorching undersides.

Finally, our exciting Woz-watch, after many weeks, has come to a sad end: Steve Wozniak was voted off “Dancing with the Stars” this week after one misstep too many. Down, but not out, the Apple co-founder swore that the “geeks shall inherit the earth”… just not the dance floor, any time soon. Please.

More next week.

Talks between the two companies continue. And, according to DealBook, which pegs the price at $9.50 a share, a deal could be announced as soon as Friday. If it is, it will likely prove the largest in IBM’s history, surpassing its $5 billion acquisition of software maker Cognos in November 2007.