Ellison: 'We don't know' on tech rebound


Ellison says he isn't really interested in being richer than Bill Gates but like the World Cup wants his team to win

By Alex Frew McMillan

HONG KONG, China -- Oracle CEO Larry Ellison told CNN on Wednesday he is unsure when global tech spending will rebound.

"We don't know," Ellison told Newsbiz Today, when asked if better times are ahead for his company. "The fact is that the buying climate remains very tough. There aren't so many big deals around anymore."

On a lighter note, the Oracle founder said he never really wanted to be richer than Microsoft chief Bill Gates.

Oracle is the world's second-biggest software company, after Microsoft. Its global sales fell for the first time ever, year on year, it reported to Wall Street late Tuesday.

Ellison said Wednesday he is looking to China as an increasingly important market. He was speaking to CNN via satellite from San Francisco.

China welcomed 'with open arms'

"China is about the most business friendly climate I've been in in a long time," he stated. "It's kind of interesting coming from northern California, where businessmen are definitely not heroes."


Oracle is looking to China, where business gets a stronger reception than in northern California, Ellison tells CNN

He said he was attracted to the attention business gets in China as well as China's rapidly rising demand for software.

China's economy is showing the fastest growth in Asia and regularly tops the world's largest nations for its pace.

"China's economy will grow, so we would welcome it with open arms," Ellison said. He said he feels a slow rebound is coming in the United States but it will not be 'V-shaped.'

Oracle already has operations in Shenzhen. It announced this month that it is opening a software-development center in Beijing, its second base in China.

In announcing earnings, Oracle revealed that revenue dropped to $2.77 billion in its business year ended May 31.

Better than slashed estimates

That was down 15.8 percent from the same time last year. But it was better than forecast, after brokerages slashed their estimates. The market has become increasingly pessimistic about the company's prospects (full earnings story).


Oracle's stock has slumped as the market became increasingly pessimistic about the company's prospects

Net profit for the fourth quarter fell to $656 million, down 23.3 percent from the year-ago period.

The company, based in the San Francisco suburb of Redwood Shores, California, doesn't anticipate getting out of the woods immediately.

Ellison said he cannot tell when better economic figures will translate into corporate profits or tech spending.

"The fact of the matter is that no one knows," he said. "Hopefully, you know, if not the next six moths, then the first half of 2003."

That mirrored comments from Chief Financial Officer Jeff Henley, who told analysts that Oracle's "visibility going forward remains very limited, as has been the case for the last 18 months."

Not interested in being richer than Gates

Ellison injected a lighter note when asked if he minded being worth less money than rival Bill Gates. Ellison once bested Gates in Forbes magazine's list of the world's wealthy but has slipped behind again.

Ellison, who founded Oracle in 1977, said wealth was a team game.

"We're right in the middle of the World Cup now, and I've never really been interested in being richer than Bill Gates," he stated.

"I would love the Oracle team to beat Microsoft," he added. "Here in the World Cup, if you score 3 goals, and your team loses 4 to 3, you don't feel very good."

Stock up in after-hours trade

Ellison has reason to hope for an upset. Hosts and former also-rans South Korea won their first knockout game in history on Tuesday, eliminating tournament front-runner Italy 2-1 in extra time (full story).

Before the results, Oracle stock ended down 2.4 percent at $8.98 in the United States. But it is up 3.0 percent in after-hours trade.

Among other techs, computer maker Apple and chipmaker Advanced Micro Devices cut their profit outlooks on Tuesday.

That led to a dip on Nasdaq, which fell 0.67 percent to 1,542.96. But the Dow Jones industrial average, up 0.19 percent, and S&P 500, up 0.09 percent, each gained a little ground (U.S. roundup).

Asian markets have opened lower on Wednesday.