Will Oracle's Phillips' Affair Revelation Be A Distraction?

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Oracle President Charles Phillips on Thursday acknowledged an 8 1/2 year extramarital affair after his jilted mistress plastered several cities with billboards calling attention to their relationship. While it's tempting to poke fun at this soap opera drama, the situation actually has serious business implications.

Phillips is set to lead a meeting with press and analysts on Jan. 27 to discuss details of Oracle's $7.4 billion acquisition of Sun Microsystems, which earlier this week finally passed muster with the European Union. But in light of Phillips' admission of infidelity, and the public stage on which the drama is playing out, will Phillips' appearance be too much of a distraction?

Oracle didn't respond to a request for comment on whether Phillips will appear at next week's event. But one would suspect that even if Phillips does speak, he won't be fielding any questions from the audience.

From Sun's perspective, this is more than just an embarrassing indiscretion. The EU's foot dragging in approving the Oracle-Sun deal has placed an enormous strain on Sun, which according to Oracle CEO Larry Ellison has been losing $100 million every month the acquisition has been delayed.

Uncertainty over Oracle's plans for Sun's product line has decimated Sun's sales, as customers have been waiting to see what Oracle plans to keep and what it will phase out. The industry has been waiting for details on how the software and hardware product integration will work, which is why this is the worst possible time for a scandal like this to rear its head.

Phillips' mistress, 41-year old actress and writer YaVaughnie Wilkins, reportedly paid $250,000 to erect billboards that appeared this week in Manhattan, Atlanta and San Francisco. The billboards, titled "Charles and YaVaughnie," show the couple snuggling and smiling, along with a quote from Phillips that reads "You are my soulmate forever!"

The billboards also direct viewers to a Web site -- which has since been taken down -- containing numerous photos of the couple canoodling in various global vacation spots. Speculation is that Wilkins' billboard campaign was in response to Phillips' decision to get back together with his wife Karen, who filed for divorce in June 2008.

The appearance of the billboards prompted Phillips to issue the following statement Thursday: "I had an 8 1/2-year serious relationship with YaVaughnie Wilkins. My divorce proceedings began in 2008. The relationship with Ms. Wilkins has since ended and we both wish each other well."

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