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Is an Adobe Acquisition in the Cards for Microsoft?

By - Source: Tom's Hardware US | B 47 comments

Don't panic, it's just one of many possibilities that Steve Ballmer and Adobe CEO Shantanu Narayen talked about when discussing how to take on Apple.

A blog post by the New York Time's Nick Bilton yesterday stirred up trouble in the tech industry and caused Adobe stock to soar amid speculation that Microsoft could acquire Adobe. Bilton reports that Ballmer and Narayen recently held a lengthy closed-door meeting about teaming up against Apple:

"The meeting, which lasted more than an hour, covered a number of topics, but one of the main thrusts of the discussion was Apple and its control of the mobile phone market and how the two companies could team up in the battle against Apple. A possible acquisition of Adobe by Microsoft were among the options."

Loose-lipped employees and consultants who were involved in the discussions or familiar with the organization spilled the beans on the meeting. They all requested that they not be named because not only were they not authorized to talk about the meeting, they were specifically told not to.

"Those involved in the meeting, from its logistical set up to the discussion that took place, were instructed to stay quiet about the two companies holding council," writes Bilton.

However, that didn't stop anyone, it seems. Among the topics of conversation were Apple and Steve Jobs dislike for Flash, and the possibility of Microsoft acquiring Adobe. One of the NYT sources revealed that Redmond had talked about an Adobe acquisition years ago but the discussion never got past friendly talks as Microsoft was afraid the Department of Justice would block the deal citing antitrust laws. However, NYT reports that the source also noted that, back then, Google and Apple were not the dominating forces they are now.

Though Ballmer and Narayen may have talked about an acquisition, some say such a deal is 'unlikely.' The Financial Post writes that, despite Adobe stock soaring in the wake of the news (it went as high as 17 percent in intraday trading and closed at an 11.5 percent gain), analysts are unconvinced.

"A Microsoft acquisition of Adobe makes little sense and is unlikely in our view," FP cites Walter Pritchard, a financial analyst with Citigroup Global Markets, as saying.

"Adobe’s Acrobat and Creative Suite are top 5 Windows desktop applications (along with Office), making it easy to make the case such an acquisition would be anti-competitive,” he later added.

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  • 22 Hide
    soundping , October 9, 2010 5:01 AM
    Maybe Ballmer wants someone to photoshop hair on his head? ;) 
  • 15 Hide
    Ragnar-Kon , October 9, 2010 5:23 AM
    Gonna second that "No."

    Microsoft is already one of the top software companies, if not THE top software company. As much as I dislike Apple's business practices, I still think the consumers could only be hurt by the merger.

    But if it does happen, should be interesting what they decided to do with the Mac versions of Creative Suite. Creative Suite is definitely in the top 5 most used Mac software, if not the top 3.
Other Comments
  • 22 Hide
    soundping , October 9, 2010 5:01 AM
    Maybe Ballmer wants someone to photoshop hair on his head? ;) 
  • 15 Hide
    Ragnar-Kon , October 9, 2010 5:23 AM
    Gonna second that "No."

    Microsoft is already one of the top software companies, if not THE top software company. As much as I dislike Apple's business practices, I still think the consumers could only be hurt by the merger.

    But if it does happen, should be interesting what they decided to do with the Mac versions of Creative Suite. Creative Suite is definitely in the top 5 most used Mac software, if not the top 3.
  • 0 Hide
    zoemayne , October 9, 2010 5:46 AM
    Adobe is too big of a name. Adobe has a lot going on for itself. Its is doing very good for itself.
  • 4 Hide
    jsc , October 9, 2010 5:48 AM
    If it's making money for them, Microsoft will continue to sell it.

    Most of you are undoubtedly too young to remember that when Apple was suing Microsoft over "look and feel" issues in Windows 3.0, Microsoft was still licensing ROM code for the Apple II computers.
  • 0 Hide
    Nesto1000 , October 9, 2010 5:56 AM
    Why are you guys making such a big deal over the "Microsoft buying Adobe" thing?
    The main point is that Adobe and Microsoft want to team up against Apple in the mobile market.
    I'm fairly certain that Microsoft will never buy out Adobe...
  • 0 Hide
    bison88 , October 9, 2010 6:04 AM
    That photo soooo fits Steve Balmers Microsoft situation right now lol. As for Microsoft buying out Adobe? I doubt it, they would have done it when Adobe was cheaper if they were going to.
  • -1 Hide
    fflam , October 9, 2010 6:18 AM
    an Adobe Microsoft merger/friendship brings some interesting things to the table. like flash getting merged into the .net framework. yes MS has Silverlight but Flash has the name and market penetration MS wants. also Adobe air could fit better in to windows better much like java intended to. not that i like flash much, just interesting prospects.
  • 0 Hide
    eddieroolz , October 9, 2010 6:40 AM
    I realize both dislike Apple, and both want to band together to fight it.

    But I don't think an acquisition is the best way to take on Apple. It would brush against antitrust laws, and Adobe and Microsoft are too different.

    There's also the issue of Silverlight vs. Flash if Microsoft does indeed acquire Adobe.
  • 0 Hide
    Gin Fushicho , October 9, 2010 7:06 AM
    Adobe should remain it's own company, but I would like to see the two collaborate on something.
  • -1 Hide
    dEAne , October 9, 2010 7:12 AM
    That's good possibilities too.
  • 1 Hide
    belardo , October 9, 2010 7:43 AM
    Nooooooooooooooo!

    It would be bad.

    New "Microsoft Office Photoshop 2015" type icons appear on your desktop. Ugh.

    A good chunk of Adobe software is sold to Mac users. It could seriously de-value Adobe and their products overall. IF Adobe had half a brain and wanted to make more money, make LINUX versions of their products.
  • 3 Hide
    randomizer , October 9, 2010 8:11 AM
    Linux versions of Flash are already garbage, no need to make them vanish altogether. Competition is important, and megacorporations don't help competition.
  • 0 Hide
    back_by_demand , October 9, 2010 9:21 AM
    Why merge to take on Apple?
    Apple bad mouths Flash and most of the world takes up Flash on their smartphones
    Hasn't Apple indirectly done Adobe a huge favour in free advertising?
  • 0 Hide
    JOSHSKORN , October 9, 2010 9:22 AM
    Ugh, it's not Apple you have to worry about, anymore. It's Google (Android). It's gaining on the iPhone. Adobe can't and won't do "Jack" for them in the mobile business.
  • -7 Hide
    ta152h , October 9, 2010 2:56 PM
    Microsoft and Adobe is a marriage made in Hell. Both make really bad, bloated and slow software. It's as natural as two sloths mating.

    Their company traditions of slow, buggy software give the merger the strong values for bliss. Opposites may attract, but they don't stay together. These two companies have suffered more angry screams from their customers than any, and I for one think these unifying values present an attraction that can not be ignored.

    You know Ballmer is an ass-clown by the fact he has to look at other companies to combat another company getting too strong. Microsoft was always the target of these alliances before he took over. It's strange to see them threatened.
  • 1 Hide
    theoutbound , October 9, 2010 3:00 PM
    In the desktop space, a merger with Adobe would make a lot of sense. Microsoft has been chasing Adobe with silverlight, the XPS document format and expression studio for quite a while. But how exactly does this help them in the mobile market? Flash is the only thing Adobe has the seems to apply, and it hardly seems like the killer feature that will allow WP7 to gain significant ground on iOS or Android for that matter.
  • 1 Hide
    ihs97 , October 9, 2010 5:24 PM
    Not sure I see where the anti-trust lawsuit comes into play here.

    1) By buying Adobe Microsoft would not have a monopoly on image editing software

    I really don't see where the lawsuit has legs. TBH, you would think Adobe would have faced a similar suit back when they bought out macromedia. I don't really see how this would be any different.
  • -3 Hide
    rhino13 , October 9, 2010 5:53 PM
    Adobe is the new Microsoft as far as loop holes go.
  • -4 Hide
    rohitbaran , October 9, 2010 7:40 PM
    What the hell. I say MS taking over Apple could be an option, provided Jobs decides to sell!
  • 3 Hide
    Vladislaus , October 10, 2010 12:27 AM
    TA152HBoth make really bad, bloated and slow software.

    Really bad software, like photoshop, premiere, windows 7, office,... Guess this is why they have a big market share.

    TA152HThese two companies have suffered more angry screams from their customers than any

    Don't you mean apple users? Most PC users don't have a problem with either of those companies.
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