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Margaret Kane

Staff Writer, CNET

Craig Conway has been fired as president and chief executive officer of PeopleSoft and will be replaced by founder Dave Duffield, the company said Friday.

PeopleSoft’s board of directors said it took the action because of a “loss of confidence in Mr. Conway’s ability to continue to lead the Company.”

The maker of business software has been engaged in a bitter struggle to fight off a hostile takeover by rival Oracle.

PeopleSoft, which last month hosted its annual customer convention, has been trying to hang onto its customers despite the merger effort. Some licensees have expressed reluctance to continue buying and upgrading their products until the fight is over.

At the customer event, Conway gave an upbeat presentation and voiced optimism that PeopleSoft would endure, despite the travails of the takeover effort. But he also acknowledged that the 15-month battle against Oracle had taken a toll.

“Have you ever had a bad dream that just didn’t end?” he asked conference attendees. Conway had been CEO since September 1999.

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Just two weeks before that gathering, Oracle had won a key court decision in the federal government’s effort to block the merger on antitrust grounds. The U.S. Department of Justice had argued that a takeover would let Oracle illegally raise prices and would hurt industry innovation.

PeopleSoft did not discuss the Oracle offer in its statement Friday except to note that “all decisions with respect to Oracle’s tender offer have been made on the unanimous recommendation of the Transaction Committee of the Board.”

Oracle has said PeopleSoft stakeholders have sold about 23.8 million shares to Oracle. Meanwhile, PeopleSoft has strengthened its ties with IBM, in what some see as a bid to bring a “white knight” to its side.

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In PeopleSoft’s executive shift, Duffield will continue to serve as chairman of the company. Kevin Parker and Phil Wilmington have been named as co-presidents, and Aneel Bhusri as vice chairman of the board. All of the changes are effective immediately.

Parker, who also serves as chief financial officer, will be responsible for internal operations. Wilmington, who had overseen the company’s American operations, will assume responsibility for worldwide field operations. Bhusri, a general partner with venture capital firm Greylock Management, will focus on product and technology strategy.

The company also said Friday that license revenue for the third quarter is expected to exceed $150 million.

Conway joined PeopleSoft in May 1999. Before his tenure at the software maker, he spent eight years at Oracle in a variety of executive roles including marketing, sales and operations. He also served as chief executive at TGV Software, a developer of applications for corporate intranets and the Internet.