Oracle threatens to enter netbook business

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It doesn't make any sense for the world's largest enterprise software company to get into the business of selling $300 netbooks -- or does it? Oracle (ORCL) has contracts with big enterprises that run into the millions of dollars. Why get into a highly competitive business with small margins that is aimed mostly at consumers?

For reasons yet unknown, Oracle founder Larry Ellison wants to become a netbook marketer, or so he says. According toThe Wall Street Journal, "I don't see why some of those devices shouldn't come from Sun-Oracle," Mr. Ellison said. Oracle recently bought server company Sun.

There may be a method to Ellison's madness. Sun has built a PC operating system of its own. Its servers are powerful enough to store data and programs remotely from small computers. Most of the heavy work can be done by these servers. Netbooks could act as the equivalent of computer screens with small processors of their own. In other words, Oracle may find that selling netbooks to large business customers is a natural extension of the server business it acquired with its buyout of Sun and its own suite of corporate software.

Or, maybe Ellison was just kidding.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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