Oracle hired former Microsoft deal maker Greg Maffei as chief financial officer and co-president, signaling the company may step up an acquisition...
Oracle hired former Microsoft deal maker Greg Maffei as chief financial officer and co-president, signaling the company may step up an acquisition spree.
Maffei, who was Microsoft’s CFO until leaving for 360networks in 1999, will run the finance and legal departments at Redwood City, Calif.-based Oracle, the world’s No. 3 software maker. Maffei set up Microsoft’s mergers group and led more than $9 billion in investments in cable, telephone and Internet companies.
Larry Ellison, Oracle’s founder and chief executive officer, accelerated the company’s expansion this year with $11.2 billion in purchases that included competitors such as PeopleSoft and closely held companies with fresh technology such as TimesTen. Maffei is Oracle’s third co-president, with Safra Catz and Charles Phillips, and is the third CFO in a year.
“Oracle wants to be more aggressive in their growth and if they can get some guys with some experience with those deals, that makes sense,” said Daniel Morgan, who helps manage $6.5 billion at Synovus Investment Advisors in St. Petersburg, Fla. The firm held 1.56 million Oracle shares as of March.
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One key challenge may be working with Ellison, 60, who has a reputation for having a strong ego and mercurial personality and whose top deputies have left the company in past years.
Ray Lane, who served as president until 2000, is now a partner at venture-capital firm Kleiner Perkins Caufield & Byers in Menlo Park, Calif. Executive Vice President Gary Bloom left five months later to run Veritas Software in Mountain View.
Maffei most recently was chairman and CEO of 360networks, a telecommunications company that emerged from bankruptcy protection in 2002. He replaces Harry You, who resigned in March after less than a year to become CEO of BearingPoint. Maffei also will run human resources, manufacturing, distribution and real estate.
New job: Oracle chief financial officer and co-president
Previous jobs: Chairman and CEO of 360networks, 2002-2005; Microsoft’s CFO , 1997-1999; other Microsoft positions, 1993-1997
Current positions:Director of video-game maker Electronic Arts and coffee retailer Starbucks; president of the Seattle Library Board.
Education Dartmouth College, 1982; Harvard Business School, 1986
In an interview from his home in Seattle yesterday, Maffei called his deal-making experience “a plus” and said it wasn’t the main reason he was hired. Catz, who has been interim CFO, will still oversee mergers and Phillips will focus on customer relations.
“I don’t look at it as I was brought here to do deals,” Maffei said. “I like to think that I can help.”
He plans to commute between Seattle and California at first because he doesn’t want to rush his family into a move.
Maffei’s desire to move up at Microsoft created friction with executives including then-President Steve Ballmer, said Jean-Francois Heitz, who was Microsoft’s treasurer under Maffei.
He described Maffei as “extremely bright” and said he left after Ballmer refused to promote him to run a major business unit.
“He joined Microsoft at a very low level and in four years became CFO from nowhere, and as we say in France, you don’t make an omelet without breaking eggs,” Heitz said from his home in Bellevue. “I think he became more humble and mature at 360.”
When Maffei told him he was talking to Oracle about the CFO job, Heitz asked how he would work with Ellison. “He said he would do what he needed to do to get along,” Heitz said.
Maffei, who started at Oracle on Wednesday and assumes the CFO post next month, said he plans to work with top executives to set strategy. He said he’s known Phillips for 10 years, Catz for five and has spoken to Ellison “off and on” for two years.
“While Oracle has been negatively perceived because of its aggressive acquisition policies, we believe Maffei will ease investor apprehension by providing a more strategic road map on the company’s acquisition plans,” UBS analyst Heather Bellini in New York said in a report yesterday.
Maffei joined Microsoft in 1993 in business development, where he set up the acquisitions group. He made a series of investments in companies Microsoft did business with, including a $5 billion investment in AT&T, a $1 billion investment in cable-TV operator Comcast, the $425 million purchase of WebTV and a $150 million investment in Apple Computer.
Microsoft wrote down many of Maffei’s investments as stock prices of those companies plummeted. That caused a re-evaluation of the investment strategy, with Ballmer saying in 2003 the company wouldn’t repeat its billion-dollar cable investments.
His ties to other industry executives also helped Microsoft smooth over relations with some competitors. Maffei negotiated the Apple investment during two meetings at Apple founder Steve Jobs’ home in California.
The two worked out the terms of the deal during barefoot strolls through Jobs’ yard, in the process helping to mend a rift between Jobs and Microsoft Chairman Bill Gates.
Maffei’s time at Microsoft may help serve as a “catalyst” to improve relations with Oracle, he said.
Oracle, which spent 18 months on a $10.6 billion hostile takeover battle for PeopleSoft, will continue to expand its database and business-applications software businesses through acquisitions, Chairman Jeff Henley said last month.
“We’re ready to rumble, we have the capacity to do more large deals,” Henley, who had been CFO until being named chairman in January 2004, said at a conference in San Francisco in May.
Oracle trails Microsoft and IBM in software sales.
Information from The Associated Press is included in this report.