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Oracle, Citigroup Team Up

Stock of e-business software company Oracle Corp. was up about 10 percent this morning after it signed a multi-faceted deal with financial services giant Citigroup .

The deal will integrate Citibank payment and settlement technology into e-marketplace applications, and also covers a number of other fronts.

The announcement comes a day after Citigroup reaffirmed its commitment to the Internet by launching an online brokerage and redesigning its online banking operation.

Citigroup said it intends to integrate Citibank's payment and settlement capabilities into Oracle's market exchange; transact Citigroup's internal spending through Oracle's open marketplace OracleExchange.com; implement the Oracle Internet Procurement solution worldwide; and market OracleExchange.com services to its corporate client base.

Financial arrangements were not disclosed, but the deal clearly is a coup for Oracle. The company's stock was up $2.60 in early trading to $27.37 -- a boost of more than 10 percent. Citigroup shares were up $1, or 2 percent, to $51.50 in the early going.

The agreement also calls for Citigroup to embed its financial services into Oracle technology, including OracleExchange.com, using Citibank's CitiConnect integrated financial solution that allows B2B participants to initiate settlement for goods and services online, at the time of the transaction.

"The world will end up with a few giant B2B exchanges -- this is one of them," said Larry Ellison, chairman and CEO of Oracle. "Citigroup and its 100 million customers form the nucleus of a B2B exchange that should become one of the first of these global giants."

"This agreement complements our efforts to be the financial services engine on B2B marketplaces," said Jorge Bermudez, executive vice president of Citibank e-Business. "Our customers will benefit from having access to Oracle's one-stop e-marketplace that automates the entire purchasing lifecycle, from obtaining product information through to settlement and payment."

Citigroup was also named the first "strategic affiliate" in the new OracleExchange.com Affiliate Program. Citigroup will utilize OracleExchange.com, Oracle's global B2B marketplace.

Oracle is on a roll; just yesterday it announced the December launch of a next-generation Internet appliance based on the Oracle9I Application Server and the Compaq ProLiant DL360 ultra thin 2-way server for management of heavily-trafficked or fast-growing Web sites.