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Larry Ellison pushes another non-PC biz plan
By Phil Harvey
Redherring.com, February 23, 2000
Larry Ellison is milking his network computing vision for all it's worth. The Oracle (Nasdaq: ORCL) chief's logic: if Liberate (Nasdaq: LBRT), an Oracle-spawned company that turned TVs into Net access devices, is now worth billions, another company that enables phones to act as Internet devices must be worth a mint.
Enter Oraclemobile.com, the latest tangible manifestation of Mr. Ellison's dream of a computing world that's not dependent on Microsoft's PC operating system. The company, despite its name, can be temporarily found at Oramobile.com until cybersquatters and Mr. Ellison's lawyers finish "negotiations." The new Oracle subsidiary, unveiled in New York Tuesday, will provide content and services to wireless consumers.
It is being billed as "the first comprehensive consumer wireless Internet portal." Using Mobile Internet Exchange (MIX) software from Motorola (NYSE: MOT) and content from companies such as Amazon.com (Nasdaq: AMZN), eBay (Nasdaq: EBAY), and ETrade (Nasdaq: EGRP), Oraclemobile.com plans to allow users to access all kinds of Internet information from Web-enabled wireless phones and two-way pagers.
SORRY, WRONG NUMBER
Although the service is available today, users may find it isn't very useful; it requires typing commands on a numeric keypad and navigating on a tiny screen. Still, Mr. Ellison is convinced that average consumers will want to tap into Internet data while they're on the move. For example, an airline could notify its customers that a flight is delayed. "You could set the threshold for when you want to be contacted, or you could hit a button and buy a ticket for another flight," Mr. Ellison says. It's a tempting scenario, but a little strange to hear from someone who jets around in his own plane.
At least one industry watcher says Mr. Ellison has experienced a change in cabin pressure. "In the last six months, I must have seen 20 venture deals targeting that space," says Bill Frezza, a general partner at Adams Capital Management and a wireless entrepreneur and consultant for 14 years. "They're selling futures and grabbing shelf space in concept-land."
Oraclemobile.com must overcome two formidable problems, Mr. Frezza says. One: Today's cellular networks are "totally inadequate for such a service because their bandwidth is too small, reliability is too low, and their bit-error rates are astronomical," he notes. Two: "You cannot surf the Web on a three-inch screen; I don't care how good the back-end software is."
The solutions to the problems are years away. The cellular network problem will be solved by the proposed cellular phone standard 3G, which is about five to ten years away, he says. The form-factor problem will only be solved when a whole new genus of devices is created.
A LITTLE VOICE
Oraclemobile.com hopes to get around some technical issues by making data accessible by voice over the Net. It plans to do this with all its applications "in the next couple of months," according to Denise Lahey, CEO of Oraclemobile.com, formerly vice president of Oracle's mobile and embedded-products division.
The technical heavy lifting required to get data from a database that powers a Web site to a tiny phone is done by Motorola's MIX software. MIX takes raw data and presents it in three computing languages: Hypertext Markup Language (HTML), Wireless Markup Language (WML), and Voice eXtensible Markup Language (VoxML). This makes the data accessible through the telephone and on both big and small screens.
Thanks to MIX, when an Oraclemobile.com user calls the service's computer, it can recognize a voice request and translates it into a URL that a Web server can understand, explains Randy Battat, senior vice president and general manager of Motorola's Internet and networking group.
The computer translates the data on the Web from bits to a robotic voice. "Speech recognition software has improved immensely in the past few years," Mr. Battat says. "Unfortunately, text-to-speech software hasn't evolved as quickly."
Oraclemobile.com plans to use its relationship with Motorola to help it sell software and services to wireless carriers. It will also use Oracle's ties to get its foot in the door with Internet companies that want their content to be accessible to consumers on the go.
MAGIC WORD: FREE
Oraclemobile.com will make most of its content and services available for free, but it may charge for some premium content services in the future, Ms. Lahey says. The company will also sell its technology to wireless carriers so they can offer their own mobile content services. In addition, it will offer to host those services for businesses that want to give their customers access to wireless services.
Eric Rasmussen, a data communications consultant for the research firm Telechoice, is bullish about Oraclemobile.com. "Within six to 12 months there will be some serious practical applications for it, and within 12 months we will see some significant deployment numbers," he predicts.
He also predicts that a number of major portals, such as Yahoo (Nasdaq: YHOO) and Excite@Home (Nasdaq: ATHM), will jump into the game by partnering with voice carriers such as Sprint (NYSE: FON) and AT & T (NYSE: T). "The portal companies want to expand their reach and the wireless service providers want to expand usage, so it's a perfect match," Mr. Rasmussen says.
Market researchers expect the wireless data market to be big, but they can't agree on a size. Dataquest says the market will reach $3 billion by 2003, while the Yankee Group says the market will reach $13 billion by that time.
If Phone.com (Nasdaq: PHCM) is any indicator, Oraclemobile.com's financial prospects are good. Phone.com, the only company in this space, has a $9 billion market capitalization. Even Mr. Frezza says the space is likely to draw lots of investor attention. His critical eye on the market "doesn't mean you won't see a successful IPO of a company that claims to solve the problems," he says. "They'll use the Oracle/Moto announcement as an endorsement and will sell this off to the public. It will be Phone.com all over again."
"A lot of the wireless network operators want to give customers personalized content, e-commerce, and other services, and that presents opportunity for a mobile portal," Mr. Battat says. He says that Motorola is also betting the farm on wireless data access, adding that within the next year or so virtually every phone the company makes will come with built-in Web-browsing ability.
Until the majority of consumers are armed with Web-browsing phones, companies such as Oraclemobile.com may be better off targeting large enterprises, turf that Oracle is more familiar with. Sources close to Motorola and Oracle say Oracle is already working on taking corporate software applications and making the data accessible via wireless phones.
Other companies see selling mobile data applications to the enterprise as a viable opportunity, too. Geoworks (Nasdaq: GWRX), for instance, will announce the launch of Mobile ASP on Wednesday, February 23. Mobile ASP is a service that will let companies offer information and other services to their wirelessly connected customers. "Consumers are used to getting [wireless data] services from a carrier," says Rhonda Jobe, Geoworks's vice president of marketing. "But I can see a time where Yahoo would have Yahoo phones and services they would sell to their customer base directly." Geoworks already operates a Web site, Mobileattitude.com, that pushes information such as coupons and restaurant reviews to wireless consumers.
Wireless Knowledge, the joint venture between Qualcomm (Nasdaq: QCOM) and Microsoft (Nasdaq: MSFT), is also emphasizing the corporate marketplace this week. On Monday, the company announced the availability of its Workstyle Server, a product that lets mobile workers get information from their Intranet via wireless devices.
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Additional reporting by Lawrence Aragon.