Oracle decided that RIM was too expensive and Palm wasn't competitive enough, and Oracle didn't have enough expertise in-house to develop a smartphone by itself, Ellison said.

"We explored the idea (of building a phone) and decided it would be a bad idea," he told the court.

Ellison was on the stand for the second day of Oracle's patent and copyright infringement trial against Google. Oracle accuses Google of using its intellectual property without a license to build Google's Android OS. Google says it did nothing wrong.

Ellison made his remarks under cross-examination by an attorney for Google, who was trying to convince the jury that Oracle filed its lawsuit because its own smartphone efforts had failed, and that Oracle now wants to piggyback on Android's success.

The jury also heard testimony Tuesday from Google CEO Larry Page, who was shown in a videotaped segment answering questions from one of Oracle's attorneys, David Boies. Oracle hoped to use the testimony to show the jury that Google knew it needed a Java license to develop Android.