Oracle: B2B Powerhouse
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Perhaps the reason is that the founder and CEO is Larry Ellison, who seems to thrive on instability.
In the past month, Oracle's stock has been surging. I would not be surprised if it continues to do so.
The company will report its earnings on December 10. And, according to the company, things look optimistic. For example, the company has been aggressively slashing its operating costs (by about $1 billion in the past six months).
Taking a closer look at Oracle, the company does not look like a mature relational database company; rather, it seems like a business-to-business powerhouse. Keep in mind that many companies already use Oracle as their database infrastructure. So, adding B2B functionality seems like a no-brainer for Oracle.
Actually, Oracle has established the Oracle Exchange, which will launch early next year. As the name implies, it is a platform for industries to buy, sell and auction goods and services. For any B2B exchange to work, there needs to be plentiful buyers and sellers. So far, Oracle has signed-up 270 suppliers and distributors.
Interestingly enough, Ford Motor signed a deal to use the platform for its AutoXchange network, which allows its suppliers and distributors to transact online. American Express has a similar deal, to enable corporate employees to book airline flights, hotel reservations, and so on.
One likely strategy for Oracle is to spin-off these units as IPOs. In fact, Oracle has already spun-off other divisions, such as Liberate (LBRT), which came public at $20 and is now trading for $127-5/8.
The main reason is that a substantial amount of revenues from Oracle derive from traditional lines of business (such as consulting and licensing). However, the B2B revenues should spike the growth rate of the company and result in a higher valuation. It could represent a lower-risk approach to play the B2B trend.