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NEW YORK (Reuters)—Sun Microsystems Inc said on Wednesday it will buy open source developer MySQL AB for about $1 billion, allowing it to expand into an estimated $15 billion database market.

Sun also reported preliminary results for its fiscal second quarter, saying it expected higher revenue and profit compared with the year-earlier period.

Sun said it will pay about $800 million in cash in exchange for all of MySQL stock and assume about $200 million in options as part of the deal.

The company said MySQL’s open source database is widely used across operating systems, hardware vendors and applications, and are expected to bring new markets for Sun’s systems, middleware and other technologies.

But some analysts questioned the purchase. Trip Chowdhry of Global Equities Research said the price tag was too steep and noted that "less that 1 percent of MySQL users pay."

Sun said it expects the deal, which should close in the late third quarter or early fourth quarter of its fiscal 2008, to add to its fiscal 2010 operating income.

Sun said it expected revenue to rise about 1 percent to $3.6 billion in the fiscal second quarter. It said net profit would range between $230 million to $265 million, or 28 cents to 32 cents per share, up from $133 million, or 15 cents per share, a year ago.

Sun shares rose 4 percent in premarket trade to $15.57 from its close on Tuesday of $14.98 on the Nasdaq.

(Additional reporting by Jim Finkle in Boston)

(Reporting by Michele Gershberg and Tiffany Wu, editing by Mark Porter and Dave Zimmerman)

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