Oracle is hit by 'dotcom hype'

Oracle is blaming the hangover from last year's dotcom boom for the drop in fourth-quarter database and applications sales.

But analysts say the company's problems run deeper, and that it needs to find new business opportunities.

Oracle beat its lowered estimates for the quarter, but saw revenue fall from $3.37bn in 2000 to $3.26bn this year - mainly because of a 24 per cent fall in application software licences and a five per cent decrease in its core database sales.

Oracle Europe executive vice president Sergio Giacolletto says last year's dotcom hype makes comparisons unfair.

"The fourth quarter slowdown in demand was as we anticipated," he said.

But startup deals only accounted for five per cent of Oracle's business, so the dotcom crash couldn't account for such low sales, says Trevor Eddolls, a consultant at analyst Xephon.

"It's a question of market saturation. Oracle needs to look for something new to sell," he said.

Meta Group programme director Michael Barnes agrees. "Oracle knew it had to diversify with the 11i application suite, but it's a difficult space to break into because of established players such as Siebel," he said.