The company's shares fell $3.88, or 4.6 percent, during today's abbreviated trading session to close at $80.19.
Although Lane, who has been with the company for the past eight years, is leaving his post as president and COO, he will remain on the company's board, Oracle said in a statement late Friday.
Oracle did not give any reasons for Lane's resignation or comment on his future plans, but analysts speculated that Lane would consider a venture capital role or dip back into his roots as a consultant.
"Oracle hasn't said anything, so that's fueled the speculation," said Gary Abbott, a financial analyst with New York-based Punk Ziegel & Co. "I think he's going to retire and be a venture capitalist. That's what a lot of these guys do. I think he just came to the conclusion that he could do this for another 10 years. But he's already at the top and made a boatload of money."
Oracle chief executive Larry Ellison will take over Lane's duties in the interim, but not take over his title, an Oracle representative said. It's not known if the company will seek a replacement for Lane, but analysts speculate that substantial responsibility will be absorbed by three Oracle executives: executive vice president Gary Bloom, chief financial officer Jeff Henley and executive vice president Safra Catz.
Though Lane had been rumored to be on his way out, analysts had mixed reactions.
"He has been talking about leaving for over a year, so this isn't a surprise," said analyst Charles Phillips of Morgan Stanley Dean Witter. "He is vested in his stock and has reached an age where he wants to enjoy his wealth and not travel five days a week."
In research notes, Merrill Lynch analyst Christopher Shilakes said the news came as a "surprise, given Lane's participation and bullishness on the recent earnings call."
UBS Warburg analyst Andrew Roskill said the timing of Lane's resignation may not be ideal, as the company enters a new fiscal year.
"This could place near-term pressure on Oracle, as Lane has held senior positions at Oracle for the past eight years and was highly regarded by the Street," Shilakes wrote in a report.
Lane, who was second-in-command
To retain Lane, Oracle tripled his salary and bonus in fiscal 1999. Last year, he received a salary of $1 million, a $25,000 increase, and a $2.25 million bonus, a tenfold increase from the previous year.
Before joining Oracle, where he most recently negotiated some high-profile online marketplace deals, such as the Covisint venture between the Big Three automakers, Lane was a senior vice president and managing partner at management consulting firm Booz-Allen & Hamilton.
Lane and Ellison made a great team, said analyst Joshua Greenbaum of Enterprise Applications Consulting. "Ray was a good balance to Larry. He was like a seasoned executive, with a slightly conservative bent," he said. "He brought a steady hand to the helm, and his consulting background gave him a real-world perspective on customer needs, while Larry was the spokesman, a mercurial advocate and the visionary."
But Greenbaum said Lane's role in the company has been diminishing as Ellison has assumed more responsibilities. "There's been some rather public statements by Ray regarding his diminished authority and influence," Greenbaum said. "Clearly for the last year, it's been Larry's company as the company has retooled itself for the Net and refocused its attention on applications."
Lane, who last year pulled in a compensation package worth $15 million including options, had a sizable 4.4 million options carrying a value of $25.7 million that had yet to vest, according to Oracle's latest proxy filing.
An Oracle spokeswoman declined to comment on Lane's unvested options or on whether he would still be able to vest, as he remains a company director. As of March 22, Lane owned 12.8 million shares of Oracle, according to filings with the Securities and Exchange Commission.
Analysts said Oracle is losing a top-notch manager who helped the database software giant refine its long-term strategy.
"(Lane's departure) is a real loss, and there's no getting around it," Phillips said. "Ray understood customers more than any other executive at Oracle...Ray brought more strategic, long-term thinking to Oracle, and hopefully he will leave some of that behind."
Abbott said Oracle will continue to trudge along.
"It's definitely a loss," said Abbott, who has a "buy" rating on the company's stock. "However, Oracle will get by without (Lane). Oracle has built a great company, and that (success) doesn't ride on the back of one man."
Still, analysts agreed that Lane will be a hard act to follow.
"No one person at Oracle could do what Ray was doing," Phillips added. "Ray had years of relationships that can't instantly be re-created."
News.com's Dawn Kawamoto contributed to this report.