Adobe-Macromedia Deal Causes Jitters

The future of Macromedia's FreeHand and other applications is in doubt.

Greeted by near universal surprise, the announced acquisition of Macromedia Inc. by Adobe Systems Inc. may forever change the publishing world. If approved, the Adobe purchase would bring together the two dominant players in the print and Web content creation markets into one blockbuster corporation.

The $3.4 billion all-stock acquisition announcement on April 18 has fueled speculation about the future the graphic arts and document enterprise space, sewn fear among select software users, and made stakeholders wonder whats next.

"The games on," Charlie Corr, group director at InfoTrends\CAP Ventures, said. "The looming battle between Microsoft [Corp.] Longhorn and Adobe is picking up steam. And this is an example of Adobe raising the stakes of that game in advance of Microsoft coming out with more features in Longhorn," Corr said. "The stakes are now higher."

InfoTrends\CAP Ventures focuses on the digital imaging and document industry, including the broad document enterprise space, not just the graphic arts. Corr said Adobe has been trying for some time to extend its offerings beyond the graphic arts market into territory traditionally dominated by Microsoft. He called the acquisition of Macromedia a bold move and said it signals that Adobe is clearly throwing its hat into the big ring.

"Adobe is really strong in the graphics market, and theyre lusting for the enterprise market," Corr said. "In our view, Adobe understands Microsoft more than Microsoft understands Adobe."

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