Oracle has announced the closure of its advertising business, ending its ambitious efforts in the online advertising market.
The decision, revealed in its most recent fourth-quarter earnings call, follows a steady decline in revenue, which fell to $300 million for the 2024 financial years, according to Oracle CEO Safra Catz.
While it may seem high, that multibillion-dollar figure is below the much higher $2 billion seen in 2022, a year in which the company decided to implement widespread layoffs to optimize the efficiency of its operations.
Oracle unhappy with advertising revenue
Oracle's efforts in the advertising sector have spanned several years: in 2014, it acquired DataLogix for $1.2 billion, before acquiring Moat for $850 million in 2017.
Then came the Cambridge Analytica scandal in 2018, which ended access to certain third-party data. Although Meta was at the center of the discussions, Oracle's cloud business was also affected due to its reduced ability to collect user data. Europe's GDPR and similar laws around the world also restricted advertisers' ability to access lucrative data.
“In the fourth quarter, we decided to exit the advertising business, which had declined to about $300 million in revenue in FY24,” Catz added.
Additionally, 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 appears to be betting on AI, a growing sector driving global cloud revenues beyond $300 billion annually, Catz noted: “Through fiscal 2025, I expect strong demand to continue.” “AI will drive Oracle’s sales and RPO even further, and result in double-digit revenue growth this fiscal year.”
The company also committed to relocating its second headquarters in four years, confirming its plans to move to Nashville, Tennessee, to bring it closer to the healthcare industry, which is undergoing a digital and artificial intelligence revolution.
