Oracle Under Wide-Angle Lens

Oracle's shares lost 11 cents Wednesday to close at $13.29.

Following last quarter's earnings call, Oracle raised pro forma EPS guidance for 2006 to 78 cents to 81 cents. Analyst Charles Di Bona of Sanford Bernstein said he believes management will "at least reaffirm" guidance on Thursday's earnings call. Bernstein does not have an investment banking relationship with Oracle.

A larger question, though, is what might be a catalyst for the stock. Like Microsoft(MSFT Quote), Oracle has traded in a narrow range for years. In fact, with a few brief excursions into higher and lower territories, it has traded between $12 and $14 a share for the last two years.

Whether Oracle's acquisition strategy will ultimately translate into more shareholder value is debatable. Analysts note that Computer Associates(CA Quote), which devoured software company after software company in the mid-1990s, traded at a lower multiple than its peers, and at a smaller premium to the S&P 500. The same phenomena may well affect Oracle.

For now, Oracle will probably downshift from acquisition mode to the digestion phase.

Speaking to thousands of customers, partners and employees at his company's annual convention in San Francisco, Ellison on Wednesday said again that for now, his company has no other major acquisitions in mind. Of course, he's said that after other acquisitions, and analysts still continue to speculate that BEA Systems(BEAS Quote), which supplies a popular piece of software called an application server, still could be on his list.

It's worth noting, however, that Ellison mentioned security and business intelligence on his list of Oracle's top priorities for the next two years. Even if Oracle has no acquisitions in mind in those sectors, a beefed-up presence by such a large player could be significant.

If anyone needed it, Oracle OpenWorld this week was another sign of the company's expanding footprint. It attracted some 35,000 people, up from 22,000 a year ago, a crowd big enough to nearly fill nearby SBC Park. And Ellison himself sounded less like the rebel entrepreneur of yesterday than an industry statesman as he preached "open standards" and industry cooperation to make the software of rival companies much more compatible.