Oracle is shutting down its ad business, which generated $300 million in revenue in the 2024 fiscal year, down from $2 billion in 2022. The decision was announced during an earnings call for the quarter ending March 31, 2024. CEO Safra Catz confirmed the exit due to declining revenues.
Background and Decline
- Revenue Decline: Oracle Advertising's revenue dropped from $2 billion in 2022 to $300 million in 2024.
- Employee Layoffs: The company had already laid off many employees as part of a reorganization in 2022.
- Acquisitions: Oracle invested billions in acquiring nearly a dozen ad tech companies over a decade, including DataLogix ($1.2 billion in 2014) and Moat ($850 million in 2017).
Key Challenges
- Data Restrictions: Meta (formerly Facebook) stopped sharing data with third parties, including Oracle, in 2018 following the Cambridge Analytica scandal, significantly impacting Oracle's data insights.
- Regulatory Hurdles: The General Data Protection Regulation (GDPR) restricted Oracle's ability to offer third-party data targeting services in Europe. This led to the shutdown of the AddThis publisher audience tool in Europe in 2019 and its complete termination in 2022.
Legal Issues
- Oracle is facing class action lawsuits over user privacy concerns.
Oracle's exit from the advertising business marks the end of a significant but ultimately unprofitable venture for the software giant.
