updated 7/21/2004 7:50:29 PM ET 2004-07-21T23:50:29

Oracle Corp. and the Justice Department prepared Tuesday for pivotal closing arguments in the government's dramatic antitrust case challenging the software maker's $7.7 billion takeover bid for rival PeopleSoft Inc.

After filing about 800 exhibits and grilling witnesses for more than 100 hours, each side had one last chance to impress U.S. District Judge Vaughn Walker, who is expected to issue his decision within two months.

The ruling could extend — or end — Oracle's relentless pursuit of fellow business software maker PeopleSoft, a saga that began in June 2003 with a hostile bid that stunned the industry.

The Justice Department contends Redwood Shores, Calif.-based Oracle should be barred from buying its Pleasanton, Calif.-based rival because their combination would undermine competition in a small sliver of the software market which accounts for about $500 million in annual sales.

Oracle has ridiculed the government's market definition as too narrow, arguing that regulators have overlooked an array of up-and-coming software makers, outside contractors and a possible expansion by Microsoft Corp.

The antitrust case is built on the premise that only Oracle, PeopleSoft and Germany-based SAP have the resources to provide sophisticated financial and personnel management software for the nation's largest companies. If the three major competitors became two, the government contends prices would rise and innovation would suffer.

Much of the case has dealt with the mundane and often abstruse characteristics of business applications software — the computer coding that automates a wide range of administrative tasks.

The trial nevertheless featured titillating moments, including an appearance on the witness stand by Oracle's billionaire CEO, Larry Ellison, who testified the company is eyeing three or four other publicly traded software companies as possible takeover targets. PeopleSoft, though, remains No. 1 on Oracle's shopping list, Ellison testified.

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