http://www.businessweek.com/ap/financialnews/D89HS0VG0.htm?campaign_id=apn_tech_down Adobe to Buy Macromedia in $3.4B Deal 4 minutes ago Add to My Yahoo! Business - AP By MATTHEW FORDAHL, AP Technology Writer SAN JOSE, Calif. - Combining two of the largest makers of software for creating and delivering digital content, Adobe Systems Inc. said Monday it will acquire Macromedia Inc. in an all-stock transaction valued at approximately $3.4 billion. Macromedia shares rose more than 10 percent in early trading, while Adobe shares sank nearly 11 percent. Both companies said the long-rumored acquisition was not to consolidate and cut costs but to help Adobe expand into new markets, particularly in the area of providing content to mobile phones and other handheld devices. "This is not a consolidation play. This is all about growth," said Bruce Chizen, Adobe's chief executive. "We're doing this because we believe the combined offerings will be even more compelling to our customers given the challenges they're going to face in trying to communicate information in this very complex environment." San Jose-based Adobe's software includes the popular Acrobat program for creating and reading documents that can be viewed on a variety of systems, including PCs and cell phones, as well as the popular Photoshop program for working with digital photographs. Macromedia, based in San Francisco, makes the Dreamweaver Web-design program and Flash, which is used to animate and add interactivity to Web sites. The company recently announced tools for expanding its reach into mobile devices as well. Neither company, however, would speculate Monday on actual product plans. Under terms of the deal, approved by the companies' boards of directors, Macromedia stockholders will receive 0.69 shares of Adobe common stock for every share of their Macromedia common stock. That will result in Macromedia stockholders owning about 18 percent of the combined company when the deal closes. Shares of Adobe lost $6.49, or 10.7 percent, to $54.17, in Monday morning trading on the Nasdaq Stock Market. Macromedia shares gained $3.48, or 10.4 percent, to $36.93. The transaction, contingent upon the approval of both companies' stockholders, is expected to be completed by the fall. It also requires the approval of federal regulators. The companies, up until about 2001, were bitter rivals, squabbling over the look of the interfaces used in their software. Still, financial analysts and customers have been speculating about a merger for years. Afterward, both struggled as Internet boom ended, said Steven Elop, Macromedia's chief executive. "We were largely focused inward, making sure we had the strategies in place for the next generation of activities," he said. "We both, in parallel, developed visions that turned out to be very complementary, and we established a track record of success that puts us in a much stronger position to look outward." Chizen will remain as chief executive of the combined company and Adobe's Shantanu Narayenb will continue as president and chief operating officer. Elop will join Adobe as president of worldwide field operations. The companies said they are in the midst of developing "integration plans" that will build on their similarities. They made no mention of layoffs. Adobe employs 3,700 people in offices around the world. It reported revenues of $1.295 billion for fiscal 2003. Macromedia reported sales of $370 million in fiscal 2004. "While we anticipate the integration team will identify opportunities for cost savings by the time the acquisition closes, the primary motivation for the two companies' joining is to continue to expand and grow our business into new markets," Chizen said. Next up ........... QUARK!
Man, that's just freakin' great. As if a $300 upgrade of Photoshop wasn't bad enough already. I'm sure this means an eventual dismantling of Fireworks and Freehand, which is fine. I HOPE that this means Go Live disappears as Dreamweaver is the standard. I get the merger, but I sure don't want to think about what it is going to cost me.
This is the second large acquisition of the programming language ColdFusion also (Macromedia bought Allaire around 2001 or so I think), so who knows what shape that will take. I personally love ColdFusion, but I can't see it surviving against PHP, Java and .NET.
Saw a great post on Slashdot about this: Freehand + Illustrator = Frustrator The web dept. where I work is a Macromedia house, so we're freakin' out about this a bit. -- droxford
Yeah, I think ColdFusion was more promising under Allaire. With that said though I think the integration of Flash into ColdFusion was great and I can only imagine the upcoming integration with the Adobe Products.
My analysis of how this will affect the major Macromedia applications: Flash It has been closely integrated with Freehand, but it will now do so with Illustrator, which means it will also integrate with PhotoShop, Premiere, Fireworks and the other Adobe graphics apps. This probably will be a good fit for Flash, though I hate to see Freehand go. I wouldn't be surprised to see Adbobe build a Linux port, though. It would be a good fit for them to have a Win, Mac, and Linux build for each of ther major products. Many of these products already have a Mac or Linux port, so it's just a matter of filling in the gaps. Cold Fusion Adobe has long had a fond affinity with the Mac world, and since CF is java-based, can work on a Linux platform, and since Dreamweaver has a Mac build, it only makes sense to think that Adobe will tweak CF a bit and start promoting it to Mac users. From there, they could bundle it with some of their other web-dev apps. Adobe has a huge following, but has no web app platform. Cold Fusion will probably be marketed to the entire Mac and Linux community, so this will probably increase the CF user base dramatically. Dreamweaver There already is a port for DW to Mac, so this fits right in with Adobe. As with Flash, I wouldn't be surprised to see a Linux port. JRun Since Jrun works on every OS in existance, this will be a huge cornerstone to many of the other products. Its existence and direction will probably not change much, but it's user base will probably skyrocket. Freehand After being superior to Illustrator for many years, yet struggling to win the battle, Freehand will die a sad and tragic death. Other MM apps like Breeze and Contribute are built on the major CF technologies (like CF and Flash), so they'll fall in line accordingly. death nell for: Macromedia Freehand (defeated by Illustrator) Macromedia Flashpaper (defeated by Acrobat PDF) Macromedia Fireworks (defeated by Illustrator & Photoshop) Adobe GoLive (defeated by Dreamweaver) -- droxford
Good stuff, Drox. I think CF will do well also. It becomes Adobe's and, by extension, Mac's alternate to .NET. CF is already available for Linux, so it isn't a stretch to get it onto Mac servers even if Mac has tried, albeit poorly, to market it's own dynamic language. The biggest issue with CF is its cost and availability in the hosting market. It is just expensive for hosting companies, so very few provide it and those who do charge an arm and a leg (well, by comparison to Linux and ASP) for it. If they can find some way to make it more accessible to a wider audience and bring the cost down, it will help significantly.
Frustrator They'll probably keep the macromedia brand for a few years before totally integrating and slowly but surely begin to MONOPOLISE EVERY DAMN THING!!!!
Name a Microsoft product that does what any of the Adobe or Macromedia products does as well as they do it and I'm there.
Assuming you're referring to Dreamweaver MX... DWMX is a bazillion times more powerful and better than Front Page (which is a steaming pile of poop). If MS improved FrontPage to compete with Dreamweaver for a web dev IDE for serious web developers, they'd have to increase the price. Personally, I liked HomeSite/CFStudio, but that has been phased out. -- droxford
True, but Visual studio only cost I believe $15 for me. Macromedia need to reduce the price for university licenses. Harderly any one buy their products here. If they do not use it in school, chances are they would not use it later.
In truth, Macromedia Studio MX only indirectly competes with Visual Studio (VS can do web and desktop dev, MX can do web and graphics/flash dev), so it's not an apples-to-apples comparison. And, Macromedia makes a student build of Studio MX for ~ $50 to $70. It ain't $15, but it's not a fortune, either. -- droxford
Yeah, I'm waiting to see what kind of Photoshop & Illustrator products Microsoft will come up with in the not-so-distant future ...
CF targeted for use on Macs in a development scenario, but not in a Mac server role? Are that many people using Macs as severs (24X7)?
