Oracle is shutting down its advertising business despite millions in revenues

14 June 2024, 15:28 published

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Oracle has announced the closure of its advertising business, marking an end to its ambitious efforts in the online advertising market.

The decision, revealed on its most recent Q4 earnings call, follows a steady decline in revenue, which dropped to $300 million for the 2024 financial years, according to Oracle CEO Safra Catz.

Although it may seem high, that multimillion-dollar figure is down from the much higher $2 billion seen in 2022, a year when the company decided to implement widespread layoffs to optimize the efficiency of its operations.

Oracle unhappy with ads revenue

Oracle’s efforts in the advertising sector have spanned several years – in 2014, it acquired DataLogix for $1.2 billion, before later acquiring Moat for $850 million in 2017.

Then came the 2018 Cambridge Analytica scandal, which put an end to certain third-party data access. Though Meta was at the center of discussions, Oracle’s cloud business was also affected due to its reduced ability to collect user data. Europe’s GDPR and other similar acts across the world also restricted advertisers’ abilities to access lucrative data.

“In Q4, we decided to exit the advertising business, which had declined to about $300 million in revenue in fiscal year ’24,” Catz added.

Moreover, the company reported a modest 3% year-over-year quarterly revenue and a 6% increase in annual revenue, which now stands at $53 billion.

Oracle now looks to be betting on AI, a growing sector pushing global cloud revenue beyond $300 billion annually, Catz noted, “Throughout fiscal year 2025, I expect continued strong AI demand to push Oracle sales and RPO even higher – and result in double-digit revenue growth this fiscal year.”

The company also committed to its second HQ relocation in four years, confirming plans to move to Nashville, Tennessee to bring it closer to the healthcare industry, which is undergoing a digital and AI revolution.