It's becoming increasingly clear that PeopleSoft Inc. isn't the only high-tech heavyweight worried about Oracle Corp.'s hostile takeover bid for the business software maker.

Previously confidential documents released late Wednesday at the antitrust trial challenging Oracle's bid show that both Microsoft Corp. and International Business Machines Corp. fear that the competitive landscape would tilt against them if Oracle took over PeopleSoft.

That prospect prompted Microsoft Chairman Bill Gates to begin considering some extraordinary defensive measures the day after Oracle launched its June 2003 bid, according to trial evidence. IBM also drew up a strategy to undercut Oracle's bid, although the specifics of that report so far have been kept secret.

Gates floated the idea of joining forces with PeopleSoft through a minority investment in the company, according to a June 7, 2003, e-mail sent to Microsoft chief executive Steven A. Ballmer.

Gates warned that an alliance with PeopleSoft might be "complicated" because it risked alienating another important business partner, German software maker SAP AG, a major PeopleSoft rival.

Microsoft never approached PeopleSoft about an investment, PeopleSoft spokesman Steve Swasey said Thursday. "This just seems to be the musings of Bill Gates," Swasey said.

Microsoft has no plans to invest in PeopleSoft, Microsoft spokesman Jim Desler said.

American Technology Research Inc. analyst Donovan Gow said that if Oracle prevails in the antitrust trial, Microsoft might reconsider an investment in PeopleSoft to help block the deal. "But I kind of doubt Microsoft would want to get into an all-out bidding war with Oracle," Gow said.

PeopleSoft stock closed at $18.47 a share Thursday on the Nasdaq Stock Market, down 22 cents. Oracle's offer values PeopleSoft at $21 a share.

Buying PeopleSoft would cost Microsoft a lot less than another of its potential countermeasures: taking over SAP, which analysts say would cost at least $50 billion.

After Gates raised the possibility of buying SAP in that e-mail to Ballmer, Microsoft began pursuing the idea over the next nine months. Gates and Ballmer met with SAP executives about a possible deal before the two sides ended the talks in the spring, concluding that the transaction would be too complex, according to trial testimony.

Microsoft and IBM are worried about substantial losses in their database sales should Oracle buy PeopleSoft. Oracle is the leading provider of database software, but Microsoft and IBM have been gaining market share with less expensive products in recent years.

The database products of Microsoft and IBM are made to support the business applications of all the major software makers. In contrast, Oracle's database works only with Oracle's business applications software -- a dynamic that raises the possibility that a takeover would lead to PeopleSoft products becoming incompatible with the Microsoft and IBM products.

In its confidential report, IBM projected significant database sales losses if Oracle were to buy PeopleSoft. The specific figures cited in the IBM report weren't revealed, but Oracle lawyers have indicated they will try to release the numbers before the trial ends next week.

Microsoft also is worried that Oracle might be able to shift more customers from the Windows operating system to the free and open Linux system, according to internal documents.

Oracle is pursuing PeopleSoft largely because it wants to expand its database share, according to Gary L. Reback, a PeopleSoft attorney. He said he thinks it's one of the reasons that the Justice Department decided to sue to block the deal, even though the database market isn't the focal point of the antitrust trial.

"Trying to look closely at the database market would have made a complicated case even more complicated," Reback said.

The antitrust case instead involves how an Oracle takeover would affect competition in a narrow market serving large U.S. companies that depend on complex software to automate many financial and personnel management jobs.

The Justice Department presented its final witness Wednesday. Oracle attorney Daniel M. Wall said Thursday that the company will rest its case next Wednesday. U.S. District Judge Vaughn R. Walker is expected to issue his decision in August or September.

Microsoft Chairman Bill Gates, right, e-mailed CEO Steven A. Ballmer last year about Oracle's bid to buy rival softmare maker PeopleSoft.