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The dog that ate Oracle's stock price

On Tuesday Oracle reported revenue growth of 23 percent for the second quarter. Wall Street promptly trashed its stock because--as good as that is--it still fell short of projections. And it's not nice to fool Wall Street.

On Tuesday Oracle reported revenue growth of 23 percent for the second quarter. Wall Street promptly trashed its stock because--as good as that is--it still fell short of projections. And it's not nice to fool Wall Street.

Groping for explanations, Oracle cited all kinds of reasons for its less-than-torrid growth. Telecommunications companies were the culprits, because they didn't buy enough of Oracle's products. The recent Oracle sales reorganization hadn't jelled yet. The Year 2000 problem was diverting corporate resources away from buying Oracle databases. And, of course, there was the favorite whipping boy of every company currently getting beat up by Wall Street: turmoil in Asia. Why not throw in the ole dog-ate-my-homework excuse while you're at it?

In all the finger-pointing and excuse-making, however, Oracle officials overlooked one obvious segment of its business as if it didn't exist--the Network Computer.

If you've happened to catch the company's prime-time commercial, you have seen a kid interacting with an NC, full-motion video and all. What's more, Oracle promises to deliver it to him, and millions others, for $299. (Presumably this does not include the cost of laying a T1 line to your house so you are able to get the total multimedia experience, or the $20 per month charge for Internet service.)

From the rhetoric, and frequency, of this commercial, it would appear that Oracle is intent on changing the world, but not with the businesses that pay the bills. Not databases. Not vertical applications. Not service and support.

The point is that Oracle seems distracted. Larry Ellison is for sure. The Oracle chief is preoccupied with businesses other than the database business that has made him his billions (give or take the couple billion he lost this past week as the stock took a tumble).

Earlier this year Ellison embarked on a half-hearted mission to buy Apple. He floated some hare-brained ideas on how he would accomplish his goal. But it seemed like he was more intent on getting headlines, and having achieved at least that part of the mission, he gave up on his "dreams." But not his involvement with Apple. Now, he sits on the board of that company, which is being run--on an interim basis--by his "friend" Steve Jobs, a man Ellison is supposedly advising on the merits of turning Apple into a Network Computer franchise.

Whether or not Ellison is whispering sweet NC-nothings in Apple's ear, the NC spiel is never-ending elsewhere. Addressing the Internet World crowd just this Wednesday--the day after Oracle stock took a beating--Larry was busy singing the virtues of the NC. Granted, the NC has the potential to become a viable business for somebody, but how Oracle plans to pull it off is anybody's guess.

Perhaps it would have been more prudent for Ellison to acknowledge the database market is "maturing" (as in, most people who could use your product already have it). He should have explained how it was that the company was able to grow its database business only three percent, given that it hardly has any competition from rivals Informix and Sybase. He also should have conceded that diving into the nascent and unproven Network Computer market has been a big distraction. But he didn't.

It's about time Ellison put the focus back on Oracle's core business. He needs to "eat his own dog food," as some Silicon Valley execs like to say. Ellison and Oracle need to prove that the NC tail is not wagging the database dog.