During its recent earnings call for the quarter ending March 31, software giant Oracle announced it is closing its advertising business. The decision comes amidst the company’s revenue decline to $300 million for the 2024 fiscal year.
Safra Catz, CEO of Oracle, told analysts “In Q4, we decided to exit the advertising business, which had declined to about $300 million in revenue in fiscal year ’24.”
Notably, as Oracle stocks have risen due to recent significant deals the investors appear unaffected by the news. These deals include the successful multicloud partnership between Google Cloud and Oracle and the extension of Azure into Oracle Cloud by Microsoft to support OpenAI.
According to Business Insider, in August 2022, Oracle Advertising was reported to have generated $2 billion in revenue. At that time, a significant number of employees were laid off during a reorganization in 2022, and the division’s revenue was growing at a modest 2% annually.
Additionally, Oracle invested billions in its advertising business by acquiring nearly a dozen ad technology companies over the past decade. Notable acquisitions include Moat, a brand safety platform acquired in 2017 for approximately $850 million, and DataLogix, a data firm purchased in 2014 for $1.2 billion.
Furthermore, in 2018 Oracle’s investment in the advertising industry faced a significant setback when Meta, then known as Facebook, discontinued sharing its data with third parties, including Oracle, following the Cambridge Analytica scandal. This move significantly impacted the level of insights Oracle Advertising could provide.
With the implementation of the General Data Protection Regulation (GDPR), Oracle Advertising encountered additional challenges which further constrained its operations. According to ADWEEK, due to the regulatory requirements imposed by GDPR, the company ceased offering third-party data targeting services throughout Europe in 2020.
According to AdExchanger, the company ceased operations of its publisher audience tool, AddThis, in Europe in 2019, in response to GDPR requirements. This decision was followed by the complete shutdown of AddThis globally the following year. Oracle Advertising has also become entangled in class action lawsuits concerning user privacy, highlighting ongoing legal challenges in the realm of data protection.