RSSAdobe Buys Macromedia for $3.4 Billion
By Nate Mook | Published April 18, 2005, 9:56 AM
In a stock deal valued at $3.4 billion, Adobe on Monday announced it has acquired rival Macromedia. The merger, which brings together Adobe's ubiquitous PDF document format and graphics suite with Macromedia's market-leading animation tools, pits the combined company squarely against Microsoft.
Under the buyout terms, Macromedia shareholders receive 0.69 shares of Adobe for every Macromedia share. The number represents a 25 percent premium over Macromedia's stock price. The deal is expected to close in the fall pending regulatory approvals.
Adobe CEO Bruce Chizen will retain his position while Macromedia CEO Steven Elop becomes Adobe's president of worldwide field operations.
Although there is quite a bit of overlap in the software developed by the two companies, both said the acquisition is focused on growth, not cutting costs. However, no specifics were given as to the fate of each company's product lines or development focus.
"Through the combination of our powerful development, authoring and collaboration tools -- and the complementary functionality of PDF and Flash -- we have the opportunity to drive an industry-defining technology platform that delivers compelling, rich content and applications across a wide range of devices and operating systems," Adobe said in a statement.
The deal underscores the growing concern that Microsoft is set to encroach on the wide market share enjoyed by both Adobe and Macromedia. Adobe's PDF document format is an industry standard for businesses, and its Acrobat Reader software ships with most PCs.
Although Adobe brings in most of its revenues from its Photoshop and Illustrator design tools, the company has begun to center its business around document creation and collaboration using PDF.
Macromedia's Flash, meanwhile, is the standard for Web animation and is beginning to dominate mobile multimedia as well; Flash is expected to ship with 75 percent of mobile phones within five years.
The growing reach of PDF and Flash has sparked concern at Microsoft, which in turn began to develop its own offerings. Office 2003 shipped with InfoPath for creating forms and sharing information, and Longhorn is expected to ship with further document-sharing alternatives to PDF.
Microsoft is also readying a new user interface language for the display of rich media dubbed "XAML." The company was rumored to be working on a tool called "Sparkle" to automate the creation of XAML interfaced, which many believed could compete directly with Macromedia Flash.
Adobe's Chizen fully expects Microsoft to push competing products, but says the newly combined company will be better prepared to fend off Redmond's advances.
"Inertia is in Adobe's favor; big companies don't quickly shift development products," Jupiter Research senior analyst Joe Wilcox told BetaNews. "Flash is widely used and available across platforms and Web browsers. Even if Microsoft developed the most compelling Flash alternative imaginable, shift in adoption would take years."
the good thing I think will happen is adobe will give the flash mx a lil work-over I hope, do what like swish and some of the other 3rd parties have done. simplify the program. learning curve just to steep. Their are some good progies out thir that make it to easy, buttons- one cool button tool flashnation menue builder,, swish,, swish video,, great tools saves time.
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|i'm still waiting for a Shockwave version for Linux, both have contributed some of their apps to Linux, but maybe this will help quicker (then again, maybe it will hurt)
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|I use Adobe and Macromedia products for educational purposes. I liked the idea of competition, where both companies poured money into R&D and we, as developers, reaped the benefits. I use PDFP to create pdfs on-the-fly, but still need the Adobe Acrobat version. I have used GIMP and PSP, but have just order Photoshop CS2 to upgrade CS. I love programming in Flash, and am looking at Breeze Live for webcasting.
I can't help but think of the old adage, "If it ain't broke, don't fix it". I'm hoping that Adobe doesn't try to "fix" the Macromedia products, but continues to let the Macromedia (now Adobe) programmers continue to do what they do best.
If Microsoft wants to compete head to head with this new merger (i.e. .xaml), I don't know if Adobe, instead of Adobe and Macromedia, will be up to the challenge. I hope so.
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|I don't care who owns flash, the only thing its good for is those crazy videos people make. Menus, popups, and banners are annoying. The music or sound effects they make are annoying. Since there is no way to turn those crappy sounds off, I just don't have it installed with Firefox, I use internet explorer if a site absolutly needs the plugin for some menu. If Firefox had a way to block sounds and servers with flash (like it can block picture servers) then I'd install it.
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|Just try FlashBlock with Firefox and u´re free of IE
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|I couldn't resist this... does this merger mean that Photoshop will now support... Flash photography? :-)
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|Thanks, I'm gonna try it right now.
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|well thats sad to hear, as doing webdesign, flash does have its ups and downs. you can animate an image in about half the size say compared to a .gif
or a java applet. Or even a button roll-over.
more or less you can cut the download time of a page in half. Falsh is hear to stay.
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|Corporate mergers usually kill things, like good software, pension plans, medical insurance, and common sense. Adobe does make two good products, but they're far from perfect. The world just got a little worse today.
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|I agree with you, anytime corporate competition is taken away it stifles creativity... Besides, in the long run Adobe doesn't stand to earn much from this buyout.
Let us pray for Photoshop.
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|Fingers crossed photoshop will stay with us!!
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|And god forbid they swap flash for live!!
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|It is not yet a given that the FTC will approve this merger.
If you are in the U.S. and you are a consumer or potential consumer of the products made by Adobe, Macromedia, or any of their current competitors, then you are entitled to voice your concerns about this proposed merger to the Federal Trade Commission.
http://www.ftc.gov/ftc/bccontact.htm
This page contains contact info for the FTC, as well as links for people who are outside the U.S. to contact their own governments' antitrust agencies.
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|I'd do it, but I wouldn't be able to come up with anything other than: "Their merged products are going to stink."
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|If you mean that the product choices available after a merger will be less appealing than the product choices currently available, then that's a perfectly valid concern for the antitrust committee to hear.
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|...very true.
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|...yeah that sucks.
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|It wasn't but a week ago, that BetaNews ran the story that Macromedia and Sun were to begin integrating into their current platforms new Ad Serving capabilities.
I really think this is a bad mix and a horrible move on both their parts.
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|Late last year Macromedia bought eHelp, and ever since then customer support for eHelp products has been terrible. Now that Adobe has bought them, we can expect Macromedia's mainly excellent products to become bloated junk very soon. The world gets worse and worse :-(
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|Less competition and less choice is bad for the consumer.
Choice drives improvements, inovation, integration and value.
We now get whatever abobe wants, it will update when it wants, it until it decides its enough.
I cant think of a single good reason or good for this outcome.
The obvious thing is ... Hmmm im Abobe and ive just spent 3.4 BILLION !!! . How can i get this back ?
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|It wasn't but a week ago, that BetaNews ran the story that Macromedia and Sun were to begin integrating into their current platforms new Ad Serving capabilities.
I really think this is a bad mix and a horrible move on both their parts.
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|Did I mention, OMG? As an avid Adobe and Macromedia user, this is just an amazingly big event on the radar.
The good:
Merger/elimination of some software apps.
The bad:
Merger/elimination of some software apps.
Yes, it would be neat to see the integration of some mainstream applications, but don't overlook the change this will bring for a lot of people. Just one small example of what poeple will be griping about: I hope they dont ixnay my favorite illustration program Freehand. Yes, I also use Illifrustrator, but mainly for better vector import into Photoshop.
And, OMG.
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|Agreed - Freehand is a far better Illustration program than Illustrator... not as polished, but better.
They should polish it up and release it as Illustrator CS3 next year - with no major changes, other than file format compatibility.
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|I don't know if this is good or bad, both Adobe and Macromedia make some good programs, and where the one company shines, the other one seems to fall short (think HTML editors for example). This can be good if they both play to their strengths, but if they don't, we could just end up with more sub-par products.
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|I think that the integtration of adobe pdf and flash/shockwave could be pretty intriguing...
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|I'm not a big fan of PDF myself, It's slow to print and takes up excess space. It does have some nice features (such as the ability to integrate PSD files into it), but not enough for me to justify using it.
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|Damn, I hate Adobe !
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|Why? You're not a graphics person, are you? Photoshop alone justifies Adobe's existence, but there are other good apps they house. Acrobat is really the only thing that has drawn such negative press. But then again, it's really a very complex application if you consider it's use in web, press and just about every other communication media.
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|Revive HomeSite (the finest hands-on html code editor ever) and continue it's development. However, please restrain yourselves from turning HomeSite into "Adobe: HomeDreamSiteWeaver6+++" bloatware! I know it's tempting... but just say "No."
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|Here, here! Homesite was excellent in it's heyday... Dreamweaver is beyond bloated. It's overtly cluttered in it's own usefullness.
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|I hate Adobe as it is.
Why oh why have they done this
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|I've been doing graphics for a living for years, and Photoshop is an excellent program.
For what it's worth though, it's the only graphics software Adobe makes that is worth much of anything, and the only place it beats out either Corel Photopaint or The Gimp is interface (and price, since it costs 10x as much).
All of their software is massively overpriced, considering the software they compete against is close to the same quality level, and costs nothing for the Gimp, or around $600 for the CorelDraw suite - which includes a large selection of software that ALL outclasses anything Adobe makes, with the exception of Photoshop, and that's close.
Adobe does fonts well...
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|If you dont want to put up with Dreamweaver for whatever reason, Homesite is still included on the dreamweaver install Disc.
I prefer Dreamweaver, but thats me.
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|hey then, what will happen to my Dreamweaver & Fireworks???? I don't prefer Photoshop much, will they stop fireworks???
ok ok we have gimp...... :) :)
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