Oracle's advertising division is closing, with no interest from the company's leadership in selling it off. This decision has led to several hundred layoffs, with many employees learning about the closure during Oracle's recent earnings call. The layoffs began last week, and by June 11, 900 executives will have been let go. Despite the layoffs, ad tech companies are actively seeking to hire the displaced talent.
Layoffs and Market Reaction
- Oracle announced the closure of its advertising division during an earnings call, leading to several hundred layoffs.
- Many employees were informed of the layoffs only during the public announcement.
- By June 11, 900 executives will have been laid off.
- Ad tech companies, including Integral Ad Science, are looking to hire the laid-off employees.
Reasons for Closure
- Oracle's advertising division, once generating $2 billion, has been neglected and is not in a position to thrive under new ownership.
- Privacy concerns, particularly following the Cambridge Analytica scandal and GDPR regulations, have plagued Oracle since 2018.
- Oracle faced a class action lawsuit two years ago for allegedly using third-party trackers without consent.
Industry Impact
- Ad tech executives are scouting for new talent and potential acquisitions.
- Integral Ad Science has already reached out to laid-off Oracle employees.
- The closure reflects Oracle's preference to shut down the division rather than sell it at a loss, avoiding a negative mark on its history.
Privacy and Regulatory Challenges
- U.S. privacy requirements are becoming increasingly complex, with companies facing significant fines for breaches.
- The ad industry is lobbying for federal guidelines to supersede state laws, but such regulations are still some way off.
Oracle's decision not to sell its ad division leaves many accounts unserviced, creating opportunities for other companies. Ad tech companies are now searching for new ad verification partners to replace Oracle's services. Oracle's decision to close its advertising division rather than sell it highlights the challenges and risks associated with maintaining such a business in today's regulatory environment.
