Software giant Oracle announced this week that it is shutting down its advertising business, a move that comes after a steep decline in revenue. During a quarterly earnings call, CEO Safra Catz confirmed the company’s exit from the advertising sector, citing a drop in revenue from $2 billion in 2022 to a mere $300 million in fiscal year 2024. Catz offered no details on the exact timeline for winding down the business or the fate of its advertising-related assets and employees.
Heavy investments in building an ad tech presence
Oracle’s foray into advertising involved a series of major acquisitions over the past decade, including data management platform BlueKai (2014, ~$350 million) and ad verification specialist Moat (2017, ~$850 million). These acquisitions, totaling billions of dollars, culminated in the formation of Oracle Data Cloud, later rebranded as Oracle Advertising.
Challenging market landscape
Oracle’s advertising ambitions were hampered by several factors. Increased privacy regulations, such as GDPR in Europe, limited Oracle’s ability to collect and utilize user data for targeted advertising. Additionally, the company faced legal challenges regarding user privacy and struggled to compete with established players like Salesforce and Adobe on price.
Focus on core business
With the closure of its ad business, Oracle appears to be refocusing its efforts on cloud computing, subscription services, and artificial intelligence. During the earnings call, the company expressed confidence in its cloud business, with CEO Catz projecting double-digit revenue growth for the coming fiscal year. “Throughout fiscal year 2025, I expect continued strong cloud demand to push Oracle sales and RPO even higher and result in double-digit revenue growth this fiscal year,” Catz said. “I also expect that each successive quarter should grow faster than the previous quarter as OCI capacity increases to meet demand.”
