This week the software giant Oracle saw its shares rise on news of significant partnerships with Open AI and Google.
This happened despite a mixed bag of news on its Q4 (ending May 31st) earnings. Oracle’s revenues for the quarter were a scant $14.29 billion, short of the $14.55 billion analysts were looking for.
But perhaps the most interesting thing that happened, from our perspective at least, was that Oracle’s CEO Safra Catz quietly announced on its Tuesday Q4 earnings call that the company will discontinue its advertising business.
I know what you’re thinking. “Oracle has an ad business?” Yes, it does. Or I guess soon we will be saying, “it did.”
According to a report in Video Week, Oracle’s ad business was bringing in about $300 million a year and revenues were declining. That’s not the kind of performance that impresses a multibillion-dollar company.
Death by a Thousand Acquisitions
So how did Oracle get into the ad business in the first place? Apparently, it invested billions in building the ad business, largely through acquisitions.
The companies that Oracle acquired along the way include its 2014 acquisitions of data management platform BlueKai for a reported $350 million, and ad targeting platform Datalogix. The latter deal’s value was not disclosed but the Wall Street Journal estimated Oracle paid $1.2 billion.
Acquisitions continued through the decade. These included the 2017 acquisitions of ad verification platform Moat for $850 million and contextual targeting platform GrapeShot for $400 million.
Business Insider reported that Oracle’s total investment in its marketing tech stack added up to around $4 billion.
Oracle was faced with the most painful of corporate pivot points. Do they keep putting good money after bad or face reality and walk away from the billions spent in pursuit of a business that just wasn’t for them? In Oracle’s case, we have the answer.
Catz offered little detail on this week’s earnings call as to the timing of the shutdown.
