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Adobe/Macromedia - Microsoft, Look Out!

As the Adobe-Macromedia Transaction Nears Its Close, a Look Back, Sideways, and Forwards at What's Been Happening Since April 18

"And, similarly, we got going with web publishing - then multimedia on the Internet, and Breeze, and some of these high-growth products. Adobe doesn't have anything that competes with these products. So there is historical, legacy-level overlap, but it's really minor. When I look at where the companies are going, there's very little overlap. And I think Bruce Chizen would say the same thing."

As we now all know, a few months later...he did! From Adobe's perspective, the deal works because Macromedia is so certain to provide future growth opportunities. Kendall Whitehouse, senior director of information technology at Wharton, characterized the Adobe-Macromedia transaction as follows: "a classic case of merging for strategic reasons."

"Adobe has a broad product portfolio, but Macromedia provides a pathway to the future," Werbach observed. "Adobe has a strong publishing position, but that's being eaten away by the web. The PDF is a bridge from paper to the web that may not always be needed. Flash is in mobile phones and is the rich interface in Tivo boxes and airport kiosks."
Voices For - and Against

Sun's Tim Bray couldn't resist pitching in on the day the deal was announced back in April, via his "Ongoing" blog, with the following entry entitled: "Adobe + Macromedia = ?"

"Seems straightforward to me. Adobe is in at the center of print production (PhotoShop & friends, InDesign, PDF), while Macromedia's DreamWeaver is the single most important Web-design product. Dave Shea says this might be about Flash, but let me suggest exactly the opposite: if you're hitching your career to Flash, it might be a good time to look at alternatives. Why's that? Because, near as I can tell, Macromedia has never made any serious money with Flash. They've accomplished one of the great, heroic, marketing coups of all time, getting the plug-in onto substantially every desktop on the planet; and this bought them, uh, what exactly? They sell authoring tools, but seriously, how many Flash designers does the world need? Anyhow, most of the good things you can do with Flash, you can do about as well with DHTML (oops that's called AJAX now) and your "back" button still works. I guess there's no reason to actually shut Flash down, the tool revenue must about cover the engineering costs. But Adobe, historically, has been good at focusing on what works and dropping the distractions. (Can you remember PageMill?) Flash is a distraction."

Before long he was set to rights be members of the Flash community worldwide, and soon afterwards added to his blog entry:

"[Update: Smell something burning? That would be me, sizzling in a torrent of Flash-flavored flame.]"

Macromedia's John Dowdell for example had a nice counter-quip:

"Funny, you'd sorta think Sun would be bullish on a cross-platform, cross-browser "write once play anywhere" kind of thingy, wouldn't you...? ;-)"

But what of those more bullish about the transaction? For example, Russell Beattie (www.russellbeattie.com/notebook/1008422.html) wrote:

"Of all the areas and products that Macromedia covers, for Adobe to point out specifically the mobile area in their merger FAQ means (to me) that Flash Lite isn't going to be forgotten. And honestly, with Adobe's worldwide market presence they might be able to do a much better job than Macromedia has done so far to get Flash on the handsets (in the West). I can see a combined Flash/SVG player (Flash Lite 1.1?) from Adobe becoming a really viable platform. I look forward to it because I think as the handsets mature, Flash will become a better way to create entertainment-oriented content than Java just like it has in the browser. Now Adobe can spend some of the energy they've been expending promoting SVG-T towards Flash as well, and that's a good thing."

And Jeremy Allaire, former CTO of Macromedia and therefore a man whose view must surely be worth bearing strongly in mind, told PaidContent.org (www.paidcontent.org/pc/arch/2005_04_18.shtml#013267): "Macromedia lost the enterprise publishing race to Adobe, and Adobe lost it with the Web publishing community. So the deal combines the best of both worlds. It gives Macromedia a huge sales channel, especially on the enterprise side. This will probably make the channels as strong as say Microsoft has."

July-August Update
In July, as it often does in deals involving software, with all its complications and nuances, the US Department of Justice requested additional information from the two companies. As arstechnica (http://arstechnica.com/news.ars/post/20050711-5079.html) noted at the time:

"The DOJ is especially interested in what will happen once the old GoLive vs. Dreamweaver and Illustrator vs. Freehand competition ceases under the suddenly larger Adobe umbrella."

"It's not unusual to see a second request (for information) in cases were the parties serve the same market, especially in software" attorney Connie Robinson told arstechnica (she heads up the antitrust department at Kilpatrick Stockton). "Unlike a widget, where you can see it and touch it," Robinson added, "software is harder to get your hands around and understand."

In August the most interesting development was probably the birth of http://blogs.adobe.com, which syndicates blogs from the likes of Mark Niemann-Ross, the Adobe Developer Evangelist working with third-party developers on InDesign, Illustrator and anything else that needs on the Creative Suite side of Adobe and Lori DeFurio, the Acrobat (and PDF) Developer Evangelist.

The founder of the site was Adobe Canada's Gavin McKenzie, who wrote (http://blogs.adobe.com/gavin.mckenzie/2005/08/beginnings.html):

"I've been working towards the launch of blogs.adobe.com for some time, along with a diverse virtual team, and at least for the very near term I will continue to have a role in the care and feeding of the site. Over the coming weeks I fully expect to discover issues and areas for improvement - please let me know either via comments or email if you spot something that isn't working or have a suggestion. Suggestions for types of blogs that you wish to see are encouraged as well."

More Stories By Jeremy Geelan

Jeremy Geelan is Chairman & CEO of the 21st Century Internet Group, Inc. and an Executive Academy Member of the International Academy of Digital Arts & Sciences. Formerly he was President & COO at Cloud Expo, Inc. and Conference Chair of the worldwide Cloud Expo series. He appears regularly at conferences and trade shows, speaking to technology audiences across six continents. You can follow him on twitter: @jg21.

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Most Recent Comments
JSaiya 10/21/05 12:40:46 PM EDT

"He [Macromedia's former CEO, Robert Burgess] elaborated that the only two cases of point products where the two companies competed were Adobe Illustrator/FreeHand and GoLive/Dreamweaver"

Hmm. What about Photoshop/ImageReady vs. Fireworks? Or do they consider FW to be just an add-on to Dreamweaver? I know FW alone is not a competitor to Photoshop for non-Web imaging, but in the Web space...?

I'd hate to see FW disapear. Maybe ImageReady will go away.

MXDJ News Desk 10/15/05 04:29:00 PM EDT

Adobe/Macromedia - Microsoft, Look Out! On April 18, 2005, as we all know, Adobe Systems Incorporated announced a definitive agreement to acquire Macromedia in an all-stock transaction valued at approximately $3.4 billion. This is a look back, sideways, and forwards, based on what's been happening since then.

Ruth 09/21/05 05:40:58 PM EDT

A hardy wheat grown mostly in Europe.

Did you not mean spelled out?