Mar. 18--Sun Microsystems is reported to be in negotiations for a possible $6.5 billion sale to IBM, a deal that would shake up the global tech industry and spell the end of a venerable but now-struggling Silicon Valley pioneer.

The talks were reported this morning by the Wall Street Journal, which cited unnamed sources familiar with the matter. A Sun spokeswoman declined comment on the report; an IBM spokeswoman said she could not immediately comment.

Sun's stock, which closed at $4.97 on Tuesday, was soaring above $7.50 this morning.

Speculation about a possible sale of Sun has swirled since last summer, as the company was struggling with slipping sales even before the recession hit other tech companies last fall. Sun, which is known for its Java programming language and has lately made a push into database programs and other open-source software, was seeing sales drop off in its core business of selling high-end computer servers and storage business.

Sun's revenue suffered further in recent months as turmoil in the financial industry hit some of its key customers on Wall Street and in the banking sector. Meanwhile, a key investor -- Southeastern Asset Management, which focuses on what it considers under-valued companies -- increased its stake in Sun Microsystems to 22 percent and announced last fall that it planned to talk with Sun management about the tech company's future.

New York-based IBM, which is a leading seller of computer servers, has also been remaking its business to focus on software and services. While Sun's server business could help IBM, especially given this week's announcement by networking giant Cisco Systems that it plans to begin selling its own servers, Sun's software and intellectual property could also be a valuable addition to IBM's portfolio.

If a deal goes through, it could be worth $6.5 billion or more, according to the Journal. That would be more than twice the market capitalization of Sun, which has seen its stock price sink below $5 in recent months.

The deal would also be a major disruption in the tech industry, giving IBM more ammunition in its rivalry with Palo Alto-based Hewlett-Packard. HP, which is also a major seller of servers and storage hardware, has recently challenged IBM in the lucrative IT services business, with HP's $14 billion acquisition of EDS last summer.

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