chief Larry Ellison is taking another stab at the Internet appliance game. But this time the appliance is the cell phone, and Oracle is focusing on the software end of the business.
Analysts say wireless is the right place to be right now, and anything Oracle does to drive more traffic onto the Internet will benefit its core database software business. But some analysts were a tad skeptical that all the pieces of this new initiative fit together. The stock rose 3/4, or 1%, to close at 59 5/16.
As soon as its lawyers liberate the name from cybersquatters, Oracle will seek to make
a handy wireless portal that can be accessed from any cell phone with an Internet connection. The free site will be e-commerce and content-focused, with revenue to come from advertising and transaction fees. The portal will feature services ranging from
will provide email and calendar services and plans to have voice-recognition software available in two months, so users can navigate the wireless Web sites through voice commands.
Oracle named Denise Lahey as CEO of the venture. She ran Oracle's mobile products division, and was with
before that. The software engineer will have a little time to allay analysts' concerns before the company is taken public, which is "as soon as possible," says Ellison.
Despite the fanfare, not everyone was persuaded about the venture's prospects. "I think this is still at a show-me stage," says
Warburg Dillon Read
analyst Andrew Roskill, who has a buy on Oracle. "They don't even have the domain name. It amazes me that they would make the announcement without having that name acquired." (Warburg has no banking ties to the company.)
"When all you have is a hammer everything looks like a nail," says
C.E. Unterberg Towbin
analyst Alex Kotlyar, who has a buy on Oracle. "This is a database and application world, so they are viewing the wireless market as another way to get onto the Web." Unterberg Towbin has no banking ties to Oracle.
Oracle's missteps, big and small, are likely to be forgiven for the time being because the company is increasingly seen as one of the primary technology providers for the Internet. "People have recently woken up to the fact that Oracle is an Internet infrastructure play," says Roskill.
In addition to a consumer site, OracleMobile will also sell its portal-to-go browser technology to companies looking to pipe contents of their Web sites into mobile phone miniscreens. Oracle, the No. 2 software company, will sell the technology for businesses to develop, or sell businesses the service of creating and hosting the wireless portal.
"This is the right idea, the right vision, but timing is key issue," says Roskill. "How long will it take to reach fruition? Is it the right business model? Is the competition going to counter with anything substantial?"
Ellison has yet to deliver on his 5-year-old prediction that access to the Internet is a machine's supreme function. His bold move at the time was to create
, a subsidiary that builds desktop computer terminals that tap the Internet for software. Thus far, NCI has had several iterations and a sold only a half million units in its five years.