Goldman Sachs Conference: Oracle Aims for Net

As if the .com mania wasn't bad enough, now respected companies want to join the party.

Goldman Sachs analyst Rick Sherlund summed up Oracle's (ORCL Quote) presentation at the Goldman Sachs Technology Investment Symposium today when he said, "we may have to turn over Oracle to our Internet research group by the sound of this."

How true. Oracle CFO Jeff Henley and global marketing chief Mark Jarvis touted, yet again, the software company's Internet vision. "There's a major shift in platforms towards the Internet," Jarvis said. "So far, it has only had a major impact on consumers but we believe next year, the Internet will have a major impact on businesses."

And when it does, Oracle will be right there to help businesses move online with the new Oracle8I database and the company's new Web-enabled applications that only require users to have a browser on their desktops.

Though the message has been the same since late last year, Oracle still drew a standing-room-only crowd. Amazingly though, among the fund managers interviewed, most were not holders of Oracle stock, or only had very small positions. Earlier this month, Oracle shares hit a record high of 61 3/4. Wednesday it finished 53 11/16, down 15/16.

"I don't own any Oracle," said one Connecticut-based portfolio manager. "I just went to see if they'd say anything new. When they didn't, I left about halfway through."

However, Oracle convinced someone today -- but not at the conference. Salomon Smith Barney analyst Neil Herman, who has remained cautious about Oracle even through its last surprisingly strong earnings report, upgraded Oracle to a buy from neutral. "We believe that the Internet and e-commerce-related infrastructure software sales are breathing new life into Oracle, and most importantly, significant incremental database revenue opportunities," he wrote in a report.

E*Trade Hangs Tough

Fighting a falling stock amid troubling questions about the company's technology, an E*Trade (EGRP Quote) executive did his best to wow money managers Wednesday afternoon.

After enduring extended media attention last week for its three days of trading interruptions, E*Trade chief financial officer Len Purkis was faced with a packed room.

In his very first sentence, Purkis mentioned the technical glitches, but he went on to offer a shiny overview of E*Trade's business. When he did address the technology problems of Feb. 3 to 5, it was to reiterate E*Trade's 99%-plus availability and its commitment to technology.

"Since the launch of Destination E*Trade, we had no interruptions in electronic trading before last week," he said. (Destination is E*Trade's portal site that it formally launched in September.) He said it was the first significant service lapse since its IPO in 1996.

In the break-out session, which was closed to the press, attendees said the technical snafu was the first issue discussed. They said Purkis minimized the possible financial costs of the trading interruption in terms of reimbursements and claims relating to execution problems. After the break-out, Purkis declined to comment on the issue. An E*Trade spokeswoman didn't immediately return a call for comment.

Despite E*Trade's high-profile tech issues, three money managers who attended the break-out session were more concerned with what would happen if trading, especially in Net stocks, tapered off. Internet stocks have provided a big trading volume boost for online brokers and have generated interest in online trading. In a sustained downturn, E*Trade's trading revenue could drop off and its stock could plummet.

Purkis outlined E*Trade's plans to decrease its dependence on trading revenue by adding more products and services.

Wednesday, E*Trade closed up 6% at 42 3/4, Ameritrade closed up 28% at 83 5/16 and Schwab closed up slightly at 63.

Platinum Fails to Regain Luster

The mood was more somber during Platinum Technology's (PLAT Quote) presentation. Platinum CEO Andrew Flipowski told investors that after a disappointing fourth quarter, the pain was not going away.

"There are still issues in first quarter that we need to clean up," he said. Yet he also noted that operating margins should start to improve in the second quarter because the sales force will be fully trained and ready to execute effectively by then. Platinum's acquisition of Memco (MEMCF Quote), announced last year, is expected to close in early March. After that, he said that the company would avoid making more acquisitions and refocus on its core businesses to help get its stock price back up this year. Platinum stock has been trading between $12 and $16 this year. Wednesday, it closed up 7/16 at 13 7/16.

If things don't turn around quickly for the Illinois-based company and the stock price fails to rise significantly, Flipowski admitted that the situation could be dire. "We need to get the stock price to dramatically improve or else we'll drop out of the top 10 among software companies and have to sell the company," he said.

"They'll have a lot to prove," said one fund manager. "I think this is a wait-and-see situation. It could be another six months until we know."