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Is an Adobe Acquisition in the Cards for Microsoft?

by - source: Tom's Hardware US

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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soundping 10/09/2010 7:01 AM
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Maybe Ballmer wants someone to photoshop hair on his head? ;)

Ragnar-Kon 10/09/2010 7:23 AM
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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.

zoemayne 10/09/2010 7:46 AM
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Adobe is too big of a name. Adobe has a lot going on for itself. Its is doing very good for itself.

jsc 10/09/2010 7:48 AM
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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.

nesto1000 10/09/2010 7:56 AM
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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...

bison88 10/09/2010 8:04 AM
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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.

fflam 10/09/2010 8:18 AM
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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.

eddieroolz 10/09/2010 8:40 AM
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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.

Gin Fushicho 10/09/2010 9:06 AM
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Adobe should remain it's own company, but I would like to see the two collaborate on something.

dEAne 10/09/2010 9:12 AM
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That's good possibilities too.

belardo 10/09/2010 9:43 AM
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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.

randomizer 10/09/2010 10:11 AM
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Linux versions of Flash are already garbage, no need to make them vanish altogether. Competition is important, and megacorporations don't help competition.

back_by_demand 10/09/2010 11:21 AM
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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?

JOSHSKORN 10/09/2010 11:22 AM
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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.

ta152h 10/09/2010 4:56 PM
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theoutbound 10/09/2010 5:00 PM
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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.

ihs97 10/09/2010 7:24 PM
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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.

rhino13 10/09/2010 7:53 PM
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Adobe is the new Microsoft as far as loop holes go.

rohitbaran 10/09/2010 9:40 PM
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otacon72 10/10/2010 1:37 AM
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TA152H :
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.



Spoken like a true troll..lol You're either an Apple or Linux funboy.

Vladislaus 10/10/2010 2:27 AM
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TA152H :
Both 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.

TA152H :
These 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.

ta152h 10/10/2010 2:55 AM
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randomizer 10/10/2010 3:12 AM
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Vladislaus :
Most PC users don't have a problem with either of those companies.


The companies, no, but definitely the products. Especially MS products, since Adobe products are normally used by people with a clue about them. Tech support exists for a reason.

demonhorde665 10/10/2010 5:44 AM
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TA152H :
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.




you hoenstly soudn like you enver actually sued photoshop or any creative swuite program , theya re industry standards becaue of their speed adn reliability you doofus nearly any art based industry requires thatr you know atleast photoshop rather it be the game industry or the fashion industry.

randomizer 10/10/2010 5:49 AM
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demonhorde665 :
you hoenstly soudn like you enver actually sued photoshop or any creative swuite program , theya re industry standards becaue of their speed adn reliability you doofus nearly any art based industry requires thatr you know atleast photoshop rather it be the game industry or the fashion industry.


Speed and reliability can't possibly be the reasons why those programs are industry standards or the people who "define" the standard were drunk when they did so.

And because a program is mandatory knowledge doesn't make it superior. Some companies demand that all documents must be written using the DOC format when there is no valid reason for this (and plenty of reasons why such a mandate should be removed).

climber 10/10/2010 6:48 AM
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Ironic that MS and Adobe are talking since it was Microsoft through it's venture capital front company, vector capital that bought out Corel Corp remaining shares and took it private when it was in trouble and once it was back in the black it's now a profitable publicly traded company. Back as far back as Windows 1-3.x Corel DRAW sold many on Windows since it was the only graphics application for Windows. Also Adobe was the only graphics tools of any import for Apple... Times they do a change...

Vladislaus 10/10/2010 10:55 AM
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TA152H :
I'm guessing you know next to nothing about computers, or you'd never make the remarks about Microsoft.


Of course I know next to nothing! I work at IT, so what's your job?
TA152H :
Of course, Apple beat them to the GUI idea


Dear lord and Apple fans still wonder why they are disliked by the rest of the tech community. Apple did beat Microsoft to the use of the GUI, but it certainly wasn't their idea. Apple stole the GUI from Xerox. In fact the GUI of the Mac OS X still looks like the on the Xerox Star, the only difference is the dock. But the dock was stolen from Sun's Looking Glass. The mouse? That's right it was also stolen from Xerox. So who's the one that doesn't know anything about computers?
TA152H :
I have no idea what this has to do with Apple. Apple is a completely opposite company. They have created new things for the marketplace throughout their history, and gouged their customers for the pleasure.


Could you please show me a truly revolutionary product from Apple? There isn't any. What Apple's done is release existing tech with flair. So Microsoft isn't alone.
TA152H :
Adobe Flash is buggy as Hell. It's also slow. Didn't you read how everyone is moving away from it? It's got too many issues. Even the companies that say they'll keep using it never say it's good, just that it's out there, and a de-facto standard. But, its days are numbered.


Flash does have it's bugs, but it's far from being buggy has hell. It's slow but still faster than the alternatives. It's days aren't numbered HTML 5 has a long road ahead if it wants to get ahead of flash because it is way a lot slower than flash in rendering animations. The best they can hope is replace flash in video sites but even that is in danger because the W3C failed to reach an agreement of the video codec to be used. Also the reason many claim that flash is slow is because some websites exaggerate in its use, specially movie sites.

Vladislaus 10/10/2010 11:00 AM
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randomizer :
The companies, no, but definitely the products. Especially MS products, since Adobe products are normally used by people with a clue about them. Tech support exists for a reason.


So tons and tons of companies that use windows is because their IT personnel don't have a clue what they're doing?
So Apple doesn't have a tech support? Oh that's right they don't, whenever they have a problem they hide it behind a door so that anyone doesn't see it.

randomizer 10/10/2010 11:07 AM
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Vladislaus :
So tons and tons of companies that use windows is because their IT personnel don't have a clue what they're doing?


You said it, not me (in fact that's the opposite of what I said). I was referring to consumers anyway. But to an extent it is true. There are a lot of "IT professionals" who are really "Windows professionals" and who would crumble if they had to step outside of their clicky-clicky comfort zone.

I don't know why you brought up Apple. I guess it was just to add some extra kick to your argument because it's cool to bash Apple on this site. Too bad your comment was irrelevant since I never mentioned Apple.

Anonymous 10/10/2010 2:18 PM
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They should merge an create a new company "Microbe"

Kryan 10/10/2010 4:09 PM
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Quote :However, that didn't stop anyone, it seems.


i lol'd


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