While much of the West Coast tech world is focused on Yahoo’s (YHOO) attempts to fend off Microsoft (MSFT), another notion currently being passed around Silicon Valley is that Oracle wants to buy Salesforce.com (CRM), a startup that’s like Google in certain respects but couldn’t be more different in one critical way: Salesforce.com makes its revenue selling software, not advertising. As I pointed out recently, while Microsoft obsessed over Google – which, in turn, obsesses over Microsoft – by beefing up its business that sells advertising, Oracle has been buying every enterprise software company it can, a list that includes Peoplesoft, Siebel and BEA. It has been a winning strategy and has accounted for Oracle’s stock trouncing Microsoft’s over the past two years.

So, would Oracle make Salesforce.com its next target? At a valuation of something over $6 billion, Salesforce.com certainly is an easier target than Yahoo is for Microsoft. It fits right into Oracle’s game plan, providing a platform for delivering pretty much any kind of enterprise software online. Salesforce.com CEO Marc Benioff loves to promote the idea that Salesforce.com doesn’t sell software. It does. Its software just doesn’t need to be installed on its user’s computers. If you think about it, Salesforce.com’s approach to enterprise software is exactly Google’s approach, at least in terms of how software is delivered. That’s why there’ve also been rumors that Google would buy Salesforce.com. (Spokespeople for each company declined to comment on the rumor; Salesforce.com hasn’t yet responded. Also worth noting, though Larry Ellison was an original investor in Salesforce.com, as of the younger company’s lastest proxy statement last spring, Ellison did not hold a stake worth disclosing.)

Having said all that, this appears to be one of those wishful-thinking rumors where there isn’t any smoke, let alone fire. (Wall Street puts credence in it, though. Salesforce.com’s stock is up about 9% Monday.) Salesforce.com is approaching the billion-dollar sales mark, but it’s just too expensive for Oracle. It trades for an astronomical 172 times Wall Street’s expectations for Wall Street’s fiscal 2009 earnings. Pat Walravens, an analyst with JMP Securities, pegs Salesforce.com’s enterprise value (market capitalization plus debt) at about six times its 2008 revenue, compared with a 3.6 multiple for its peers.

Part of the relative puniness of Salesforce.com’s earnings is that its financial performance is back-end loaded. It records sales over a long period of time, even when the business is locked up. It used to be that companies with that business model complained that Wall Street didn’t understand them. Given Salesforce.com’s valuation, it’s clear that investors understand it perfectly.

Still, it’s Oracle’s style to buy valuable software assets that for whatever reason are stuck and whose valuations are stalled. Salesforce.com doesn’t fit that bill.

A few weeks ago, when Oracle (ORCL) reported fine quarterly results, the company said it was no closer to persuading the board of BEA Systems (BEAS) to accept its earlier takeover offer. Clearly, Larry Ellison’s minions don’t quit easily. Instead, Oracle announced Wednesday it would acquire BEA for $8.5 billion, or about $7.2 billion when you subtract out the cash on BEA’s balance sheet.

A few lessons here. Pundits will say that business software increasingly is a game played only by the biggest of the big. That list that includes Oracle, Microsoft (MSFT), SAP (SAP) and three companies long known more for their hardware than software: IBM (IBM), Hewlett-Packard (HPQ) and Sun Microsystems (JAVA), which announced Wednesday a smaller acquisition of the Swedish database software maker MySQL. But, while the giants dominant the business software market, startups continue to flourish, especially of the Web variety. Salesforce.com (CRM) and NetSuite (N) are two good examples. (Though, what’s this? NetSuite’s IPO bubble appears to have sprung a bit of a leak.)

A second lesson: Silicon Valley companies that refuse to adhere to modern financial theory become takeover bait. BEA is a solid cash generator whose growth has slowed. That’s what attracted raider Carl Icahn, who saw value in BEA’s stalled shares. The fact that BEA had more than a billion dollars of cash and a mere $20 million in debt shows that it suffers from a common tech-company disease: a failure to use its balance sheet to reward shareholders. (BEA’s debt-to-equity ratio, according to Yahoo Finance, is a mere 1.4 percent; By comparison, Oracle’s is a far more aggressive 32 percent.)

Here’s the final lesson. Larry Ellison gets what he wants in the end. The seer of Silicon Valley has long been quickly dismissed for picking unneccessary fights with Microsoft earlier in his career and for his flamboyant lifestyle. While Microsoft has been battling Google (GOOG), Oracle trained its balance-sheet guns on the business it knows best, spending $25 billion in the process. The results have been impressive.

A smallish software company called NetSuite filed papers Monday with the SEC to go public. If it weren’t for the fact that Larry Ellison controls 74% of the company and that the online software provider for businesses is a relentless press hound you’d probably never have heard of this company.

As NetSuite prepares to public it will be making a lot of comparisons between itself and other companies. For instance, because it will go public using the auction method, NetSuite will point out that it’s the first big tech IPO to do since Google (GOOG). Because the company delivers its services online, it will compare itself frequently to Salesforce.com (CRM), another company Ellison, the CEO of Oracle (ORCL), helped fund.

In the spirit of comparisons, here are some NetSuite probably won’t make. NetSuite, you see, was founded the year before Salesforce.com, 1998, the same year Google was founded. When Salesforce.com filed to go public in 2004, its last full year of revenues weighed in at $96 million. It made $3.5 million that year. Google, which also went public in 2004, had revenues the previous year of $1.5 billion and profits of $106 million. As for NetSuite, which started hyping its IPO last December, its last full year of revenues were $67 million, on which it managed to lose $23 million.

There’s also the comparison of spending. NetSuite spent $44 million on sales and marketing last year, 65% of its revenues. Even the hilariously freespending Salesforce.com spent “only” 57% of its revenues on sales and marketing in its last full year before going public — and it made a profit that year.

One wonders with numbers like this why NetSuite is rushing to go public at all. Valuing IPOs is all about what Wall Street types refer to as comps. Limelight Networks (LLNW), for example, went public largely by using competitor Akamai (AKAM) as a comp. In NetSuite’s case, however, the comps don’t look that great.

It’s amusing how good Google (GOOG) has gotten at the PR game. An item (behind-the-paid-wall link alert) in Monday’s Wall Street Journal about a partnership brewing between Google and Salesforce.com (CRM) notes how in February Google launched a paid version of its collection of online productivity software applications called Google Apps. I wrote an article here about the launch, and I wasn’t the only observer to point out that Google now was going directly after Microsoft’s (MSFT) Office franchise.

There’s just one catch. Three months on and Google hasn’t started charging the $50 per user per year it said it would charge for the “premier” edition of Google Apps. (The high-end version gets each user Gmail, Google Calendar, Google Talk and Docs & Spreadsheets, plus 10 gigabytes of storage and round-the-clock customer service.) Initially, Google was going to begin charging at the end of April. Now, Dave Girouard, the Google vice-president in charge of the product, tells me the money will start flowing at the end of May. What’s more, says Girouard, Google is contemplating an ongoing “trial period” for new users. He won’t say how many users Google has signed up or the names of any significant companies that are using the product in large numbers. (In fairness, the target market is small companies.) Girouard dismisses chatter that users are dissatisfied with the product, though he allows that “there are some areas where it is rough around the edges. These are still early days.”

Precisely. The media tends to get carried away by Google product announcements, much the way any new Microsoft offering once was greeted by the sound and the fury. Microsoft may be in a pickle over its continuously stillborn online advertising business. But it needn’t worry about losing out in the word-processing game to Google just yet.