In a political post on one of the blogs I read, I saw a great summation of the problem that many companies get themselves into - certainly this is what befell ParcPlace back in the 90's, and I think it's what's wrong at Sun now:

When American corporations have lost their way and can't figure out how to improve their market position, a common "solution" is to merge with another similarly befuddled company. This allows both companies to "grow," and permits executives to put off hard decisions for years amid talk of "synergy" and restructuring.

Look at the telecom sector - I think there's a reason that BellSouth has been successful. They haven't had to deal with the kinds of internecine warfare that crops up after a merger. Instead, they've been able to concentrate on their core business. I can tell you from experience - when entities of roughly equal size merge, there's no synergy - there's infighting.