Ford, Oracle hammer out online supply network

Oracle Corp.'s applications business got a boost Tuesday with the announcement of a joint venture with Ford Motor Co.

The new operation, AutoXChange, will give Ford a centralized platform on the Internet for buying parts from suppliers. The goal is to cut the auto maker's costs in procuring the approximately $80 billion in materials it buys from 30,000 suppliers.

The venture is being touted as the first of its kind in the automotive industry and will stand as the world's largest business-to-business electronic network, officials said.

Oracle Chief Operating Officer Ray Lane told reporters and industry analysts that he expects the venture to grow rapidly and have the ability to generate more than $1 billion in sales.

Oracle will host the application through its Business Online program, which enables users to rent hosted applications via the Web.

Officials from both companies said they plan to generate revenue through transaction fees paid by users and through advertising run on AutoXChange sites.

Ford is already a user of Oracle's databases. Oracle, of Redwood Shores, Calif., has been pushing Web-based applications for procurement and supply chain automation. Recently it unveiled the Oracle Exchange procurement platform, which it will also use in the Ford joint venture.

Reuters contributed to this report.