The new operating unit is expected to develop "dumb" terminals costing about pounds 500, which will enable customers to access the Internet without having to use more expensive personal computers. The technology, supported by several leading manufacturers, would be an "open" platform based on a common standard.
Oracle said it expected to make the Internet as prevalent as the telephone and the television are today.
Lawrence Ellison, Oracle's chief executive, said the market for software and Internet applications is "explosive".
He added: "The formation of Network Computer allows us to focus our resources on this dynamic segment."
The proposed dumb terminal would allow users to download operating software directly from the Internet, dispensing with the need for expensive operating systems in the terminal itself.
The launch is a direct attack on Microsoft, the US computer giant, which dominates the world's operating-system market with its MS-Dos.
Oracle plans to develop an industry standard for the new technology, supported by a range of computer manufacturers and telecommunications companies. Sun Microsystems, IBM and Apple Computer have all expressed support for the new platform, as have AT&T, the long-distance telephone operator, and Netscape, the Internet service provider.Reuse content