Oracle

(ORCL) - Get Report

agreed to buy

Portal Software

(PRSF)

, a small provider of billing applications for companies in the communications and media business, for $4.90 a share, or $220 million.

"We supply technology and applications to over 90% of communications companies worldwide today, and billing is a logical and complementary addition for those customers," said Oracle co-President Charles Phillips.

The acquisition is in line with Oracle's new strategy of buying small companies

with expertise in key industry segments, which Phillips detailed in an interview with

TheStreet.com

last week.

Portal's management and employees will form a dedicated global communications business unit within Oracle concentrating on billing and revenue management.

Bhaskar Gorti, Portal's SVP of worldwide sales, services and marketing, will lead the unit as general manager, and Dave Labuda will become the unit's CTO.

In recent trading, shares of Portal Software were up 65 cents, or 12%, to $4.84, while Oracle was off 5 cents to $13.79 a share.

Stuart Williams, an analyst with Technology Business Research, says Portal Software suffered from the near collapse of the market for pure-play portal companies, and its management "has been seeking an exit strategy for some time." Similar acquisitions of BowStreet by

IBM

(IBM) - Get Report

and Plumtree by

BEA Systems

(BEAS)

have reduced the ranks of portal makers, he added.

Oracle has made a number of key "vertical" acquisitions, most notably Retek in the retail market, along with ProfitLogic, i-flex and g-Log.