Oracle Shows Its Faith in Online Future
In yet another gamble that the electronic data highway will live up to its hype, Oracle Systems Corp. Chairman Lawrence Ellison said the database software company has launched two ambitious Internet ventures.
In a joint venture with British chip designer ARM, the Redwood City, Calif., company has formed Network Computer Inc.--named for the $500 Internet computer Ellison previewed earlier this month--to license the design of the machine to hardware manufacturers.
Although ARM’s microprocessor was at the heart of the machine Oracle showed at its recent developers conference, Network Computer is also designing a version of the machine that uses an Intel Corp. microprocessor, the engine of most personal computers being used today.
Next month, Oracle plans to announce a list of computer and consumer electronics companies that have signed on to make Network Computers, which Ellison said will be widely available in September.
Separately, ending months of speculation, Ellison confirmed in an interview that Oracle has joined forces with Rupert Murdoch’s News Corp. to establish an Internet service, called Interworld, scheduled to debut at the same time Network Computers hit the market.
Initially, Interworld will be available to computer users in Los Angeles, New York and San Francisco, with plans to eventually make it a global online information service.
Ellison gave few specifics on the financial arrangement with News Corp., but he said each company will hold equal minority interests in the new company and that they are seeking other investors.
The two companies have been talking for several months. The conversations became serious in January, when MCI Communications Corp., which had invested $2 billion in Murdoch’s media empire, jilted News Corp. in favor of Microsoft Corp.
Since then, News Corp. has sought investors to assume part or all of MCI’s 50% share of I Guide, the two companies’ planned Internet service.
News Corp. has spent millions of dollars to make a splash on the Internet, with little success. Its online service, Delphi, is considered primitive--it offers text but no graphics--and has a mere 100,000 subscribers. Little progress has been made on I Guide since MCI withdrew.
Interworld, modeled after the broadcasting industry, will sell technology and programming to a collection of affiliates. Ellison said Oracle and News Corp. are in negotiations with several regional Bell operating companies interested in becoming Interworld affiliates.
“We really want to turn this over to the telephone company partners as quickly as we can,” Ellison said. “We have no interest in running an online service.”
He said Oracle’s investment in the two companies will be as much as $30 million and the rights to its software. It is seeking other investors.
Oracle is the leader in the market for databases, the complex software programs that store corporate records such as payroll and customer accounts.
The Internet is a collection of databases stored in computers around the globe, and as such, Ellison has said he intends Oracle to be a leading player in that market.
Ellison has been a leading critic of today’s personal computers, contending they are far too expensive and difficult for the average consumer to use. The Network Computer, he says, will have the ease of a television set.
