It wasn't just Oracle's announcement. It was the market press trumpeting the relatively insignificant entry of Oracle, coupled with MSFT's announcement of Hyper-V (and 28$ pricing), causing investors to realize that the share price of VMW had been hyperinflated based upon poor understanding of the virtualization market and presumption that their current market-share dominance was largely unassailable despite competition from every other industry player, both software (MSFT, IBM, RHAT, CTXS) and hardware (DELL, IBM, HP). It recovered today once investors calmed down a bit, and realized that while there is strong competition, VMW has a very strong position.
Full disclosure: I purchased VMW after hours on the 9th, (due to to recent decline in the price, and personal involvement in using virtualization to fully leverage my investment in a dedicated server for my small businesses), was subsequently dismayed at the 12.5% decline, learned a valuable lesson on not fully researching a stock before investing based upon industry knowledge, and gladly took a chance to get out today at a 2.5% profit. Additionally, I am currently holding DELL, CTXS, IBM, RHAT for related reasons.