Oracle leaves GAAP behind to justify $7.4 billion deal for Sun

Today's announcement that Oracle (ORCL) would acquire Sun Microsystems (JAVA) for $7.4 billion in cash left me scratching my head. The rationale? Something to do with what Oracle's president calls "non-GAAP earnings." As if that's supposed to explain Oracle's first acquisition of a hardware company.

I'm not sure what non-GAAP earnings are, but it sounds like a special kind of accounting whipped up to justify a deal that would not look good according to Generally Accepted Accounting Principles. Safra Catz, Oracle's president, estimates that on a non-GAAP basis, the deal will add $1.5 billion in "non-GAAP operating profit" in the first year and $2 billion to this new measure in future years.