Oracle to shut down ad biz
According to Oracle CEO Safra Catz, the company's ad revenue has fallen to around $300 million in FY24. Two years ago, the same was around $2 billion
During a quarterly investor call, Oracle’s CEO Safra Catz shared that the company’s advertising revenue fell to around $300 million in fiscal 2024, following which Oracle is shutting down its ad business. According to media reports, even two years ago the very same ad business had generated $2 billion in ad revenue.
To build its advertising operations, Oracle went through several acquisitions over the past decade having acquired firms like Vitrue (2012), Eloqua (2012), BlueKai (2014) which was acquired for $400 million, DataLogix (2014) a data broker reportedly acquired for $1.2 billion, and Moat (2017) which was a measurement firm acquired for $850 million. However, the shutdown of ad business has not rocked the investors’ boat significantly, since the company also recently made headlines with massive deals that resulted in Oracle’s stocks to soar.
Deals such as Microsoft extending Azure into Oracle cloud to satisfy OpenAI, or Oracle and Google Cloud announcing a multicloud partnership overshadowed the earnings miss and advertising operation exit.
Media reports further suggest that the shutdown of advertising business may also be followed by potential layoffs within the company. The Director of Data Science Engineering at Oracle Advertising recently posted on LinkedIn - ‘Oracle announced that they are getting out of the Advertising business and I have a whole team (and surrounding teams) of highly talented Software Engineering and Data Science experts looking for the next great place to land!’
This move also comes at the back of a world looking at a future with no cookies. Even though Google delayed the phase out of third party cookies, if experts are to be believed, any business model that relies on non-consented user data is not a good way forward for a high growth business.
Oracle also faced challenges like introduction of privacy regulations like GDPR or General Data Protection Regulation, Meta (formerly Facebook) shutting down access to third-party data for ad targeting in 2018 that massively impacted Oracle’s ad biz model and stiff competition from players like Adobe, Salesforce, IAS and Doubleverify.
