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Adobe acquires Macromedia

post #1 of 58
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Adobe Systems has announced a definitive agreement to acquire Macromedia in an all-stock transaction valued at approximately $3.4 billion.

Under the terms of the agreement, which has been approved by both boards of directors, Macromedia stockholders will receive, at a fixed exchange ratio, 0.69 shares of Adobe common stock for every share of Macromedia common stock in a tax-free exchange. Based on Adobes and Macromedias closing prices on Friday, April 15, 2005, this represents a price of $41.86 per share of Macromedia common stock. That is a 25 percent premium to Macromedia's closing price of $33.45 on Friday. Upon the close of the transaction, Macromedia stockholders will own approximately 18 percent of the combined company on a pro forma basis.

"By combining the passion and creativity of two leading-edge companies, we will continue driving innovations that are changing the ways people everywhere are experiencing and interacting with information, Adobe said it in a prepared statement.

In the combined company, Chizen will continue as chief executive officer and Shantanu Narayen will remain president and chief operating officer. Stephen Elop, president and chief executive officer of Macromedia, will join Adobe as president of worldwide field operations. Murray Demo will remain executive vice president and chief financial officer. Dr. John Warnock and Dr. Charles Geschke will remain as co-chairmen of the Board of Directors of the combined company and Rob Burgess, chairman of the Macromedia Board of Directors, will join the Adobe Board.

"Both Macromedia and Adobe are passionate about creating and enabling great experiences across a wide range of devices and operating systems," said Stephen Elop, president and chief executive officer of Macromedia. "Our combined teams will be a powerful force for innovation around cutting-edge platforms for delivering content and applications."

According to CBS Marketwatch, Adobe said second-quarter earnings and revenue would be toward the high end of previous guidance due to strong demand for Acrobat. The company had been expected earnings per share between 51 cents and 55 cents and revenue of between $475 million to $495 million.

Separately, Macromedia said it expected net revenue for its fourth fiscal quarter to exceed the $108 to $113 million guidance it provided in January.

Along with the acquisition, Adobe also announced a $1 billion stock repurchase program to start after the Macromedia deal has been completed.

"After a review of the combined companies' financial position, our Board concluded that the repurchase program is consistent with our overall commitment to deliver value to our stockholders," Chizen added.
post #2 of 58
Ok, I'll say it here then.

"Oh God."
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post #3 of 58
Holy crap.
post #4 of 58
So if apple acquires Adobe, they'll own almost every form of popular digital media and the programs to make them!
If I could put a bug in Steve Jobs' office, I would be able to get some sleep!
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post #5 of 58
"Macromedia generates about 80% of its revenue from Web site design and development tools, while Adobe only generates about 2% of it revenue from this market, according to IDC research.

Adobe generates about 92% of its revenue from the authoring software market and is fourth in the Web site design market with just under 5%, IDC said."

So basically, Adobes buying Flash and their development tools, and throwing everything else away.
post #6 of 58
I for one do not like this. I am a huge fan of DreamweverMX and FlashMX and Coldfuision. I am also a huge fan of Adobe products. On a daily basis use both company's products. But I have uneasy feeling that Adobe my discontinue parts of Macromedia products that directly compete with Adobe's product line.

Although Fireworks is not as powerful as Photoshop, it is still a nice little program for super quick images. I only see Adobe keeping Flash intact and the rest of Macromedia's programs being discontinued or incorporated into Adobe lines.

I have worried how far away this day would be. I had a bet with a fellow designer that at some point with Adobe's market share they would some day absorb Macromedia being that they had competing products. And on that point what other company will force Adobe to keep pushing development as hard as it has been.

Time will tell....
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Life is not measured by the breaths you take, but the moments that take your breath away. - GC
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post #7 of 58
Yes, Adobe doesn't do well when they have no competition - look at the state Premiere was in before Apple launched FCP.
post #8 of 58
Well, this obviously means one thing for sure: that there HAS to be a competitor.

Could Apple turn out to be Adobe's arch nemisis in 4-5 years? Its already been inching on its turf over the last half decade.

Look what Apple has done with video and audio!

I can just see new trenches being dug as we speak... Apple on one side and Adobe on the other. Peering over the lines to see what the other is doing, drawing new maps, and re-arming.

Jobs will be dealing a "truce" for 3-5 years to guarantee that Adobe delivers Photoslop and other key apps to MacOS X for that time, and therefore give him and Apple time to come up with some crazy ass Apple-only 2-D and Web authoring apps.

Adobe MUST have a competitor. The only one I can see is Apple.

get ready for some really really really turbulent times in the graphics arena.

Maybe you'll see some key GIMP developers dissappearing and "sighted" at 1 Infinite Loop over the next few years. I wonder if Apple would dare buy Quark and really get the shit flying.
I'm having deja-vu and amnesia at the same time. I think I've forgotten this before.
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I'm having deja-vu and amnesia at the same time. I think I've forgotten this before.
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post #9 of 58
THIS REALLY SUCKS people.

I'm with you guys with no real competition I look for graphics web and print to absolutely suck in the future and no amount of leveraging of Core Image and Video is going to propel a smaller company from even trying to enter this realm.

Well today just may be the day a diverse graphics market died replaced by a 1600lb Gorilla. I just don't know what to take from this.
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post #10 of 58
I dont know, I think I like it. they'll never kill flash & dreamweaver. Fireworks is only useful for importing your .psd's into flash anyway
post #11 of 58
If Adobe would dump GoLive and polish off DreamWeaver I wouldn't mind.

Otherwise, this sucks!
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post #12 of 58
well, this answers a BIG question i had been having since reviewing cs2 features... basically, adobe had pretty much plateaued in their software offerings. sure, you'd see some marginal improvements, but i just do not see anything, for example, that i would EVER need out of illustrator past this version. and now that they've reached that mountaintop, there's only one thing to do...

look around at the other mountaintops and start annexing.

i dunno. i would hope that adobe would improve some of macromedia's shortcomings, but after that, what next?
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post #13 of 58
I think Adobe will sell off Golive. They sold Freehand to Macromedia back when no one had really heard of them. As for Fireworks, it has too much of a following for them to kill it. I imagine they'll just add it's functionality to ImageReady.

The lack of competition is bad, but really they are now one company with no competition as opposed to two companies with no competition. Fireworks/ImageReady was the only real overlap between these two.
post #14 of 58
Quote:
Originally posted by ZO
I wonder if Apple would dare buy Quark and really get the shit flying.

i doubt it, simply because of the mess that quark's code is these days. trying to update quarkxpress was like trying to re-wire the mess of cords behind your home entertainment center.

people, i don't think we need to worry about what will die in the graphics market. bits and pieces of the macromedia apps will live on for a long time. but now microsoft owns the office, and adobe OWNS the studio. there's only one place left for apple to own...

the home.
When you're lovers in a dangerous time,
You're made to feel as if your love's a crime.
Nothing worth having comes without some kind of fight.
Gotta kick at the darkness 'til it bleeds daylight.

-...
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When you're lovers in a dangerous time,
You're made to feel as if your love's a crime.
Nothing worth having comes without some kind of fight.
Gotta kick at the darkness 'til it bleeds daylight.

-...
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post #15 of 58
Quote:
Originally posted by MrSparkle
I think Adobe will sell off Golive. They sold Freehand to Macromedia back when no one had really heard of them. As for Fireworks, it has too much of a following for them to kill it. I imagine they'll just add it's functionality to ImageReady.

personally, i would like imageready to be thrown out of the nearest airlock, and i get the feeling it will be. anyone else notice NOTHING was updated for imageready? well, now you know why... someone told the photoshop/imageready team "don't bother... in a few weeks, we won't need a fireworks competitor."

i also don't think they'll sell golive. think about it... they've been bundling golive with the cs professional suite for a while now, so it has a HUGE embedded market... even if very few folks use it.
When you're lovers in a dangerous time,
You're made to feel as if your love's a crime.
Nothing worth having comes without some kind of fight.
Gotta kick at the darkness 'til it bleeds daylight.

-...
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When you're lovers in a dangerous time,
You're made to feel as if your love's a crime.
Nothing worth having comes without some kind of fight.
Gotta kick at the darkness 'til it bleeds daylight.

-...
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post #16 of 58
Quote:
Originally posted by aplnub
If Adobe would dump GoLive and polish off DreamWeaver I wouldn't mind.

Or merge the best of both and call it GoFlash

This does kill competition, but I ask everyone here, would you have preferred the buyer been Microsoft?
I think Adobe is the lesser or two evils.
post #17 of 58
This is totally ###$ed. Over the years Macromedia has been pushing the web and now I feel that Adobe will dominate the space in a monopoly role and the products will be watered down. NO ONE should have a monopoly in this space. Apple's only future will be to go up against Adobe and become a true software company now with a Photoshop / illustrator killer and a Dreamweaver killer app. For if Adobe ever pull the plug on Apple now its all over and Apple will start to look like Avid... As far as Adobe support vs Macromedia im realising that the market is truly going to be a different beast now with the customer ...me losing out. Adobe Are moving away from the mac. Apple should have bid for Macromedia. Screw iTunes and Year of HD if this happens Apple is in deep trouble if Adobe pulls the plug on the platform. Apple needs to go hard now with App development.
post #18 of 58
Quote:
Originally posted by rok
personally, i would like imageready to be thrown out of the nearest airlock, and i get the feeling it will be. anyone else notice NOTHING was updated for imageready? well, now you know why... someone told the photoshop/imageready team "don't bother... in a few weeks, we won't need a fireworks competitor."

Maybe so. Could just be a naming issue.

Quote:
i also don't think they'll sell golive. think about it... they've been bundling golive with the cs professional suite for a while now, so it has a HUGE embedded market... even if very few folks use it.

With Freehand, they were forced to. They may be in this case, as well. They can always make up for it with direct upgrades from GoLive to Dreamweaver.

I guess they held onto PageMaker for a long time, even with InDesign. But this might be an easier transition.
post #19 of 58
Glahrgg.

I can't say I get the warm fuzzies from this.

The one upside that immediately comes to mind, though, is that Macromedia products have by and large sucked on OS X for some time now. Anyone who's suffered through using Dreamweaver or Flash on the Mac for the past few years knows what I'm talking about.

Hopefully Adobe will raise the bar...
post #20 of 58
Quote:
Originally posted by Celco
Adobe Are moving away from the mac. Apple should have bid for Macromedia.

Adobe isn't moving away from the Mac nearly as fast as Macromedia was, though. So that flavor of gloom-and-doom doesn't make much sense to me. What is unsettling is seeing a new monopoly in creative software form right before our eyes.

And it does look like Adobe and Apple are increasingly becoming competitors. To say the least.
post #21 of 58
Why should Apple acquire Quark or any kind of page layout app? Pages appears to be their competition with Office and Quark and InDesign.

As it stands, BBEdit offers decent web design even though it lacks all the fancy bells and whistles of Dreamweaver et. al.

I agree this merger will force Apple's hand. Do they take WebObjects and tone it down for the non-enterprise user? Do they produce a photo-editing suite by year's end? Do they accelerate new features to iWork, particularly Pages? PDF is such an important part of OS X that I doubt Apple will do too much to further widen the rift between them and Adobe.
post #22 of 58
Adobe's projects are becoming bloatware. Just look at how long it takes Adobe Reader to start up, for simple PDF viewing.

Steve has publically said (at Macworld) that he is pushing Adobe to integrate CoreImage into their products, but without an equivalent on the Windows side, they probably won't invest into it. This is a perfect opportunity to bring a simpler, yet just as powerful, graphics design application to the market that compete head-to-head with Photoshop, but Mac-only, baby!

Come on Apple, give Adobe a run for their money.
post #23 of 58
I see Flash CS on the horizon now.
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post #24 of 58
Now watch Microsoft try and force a buyout of Adobe. This Adobe thing sucks, but the M$ thing would massively suck!!
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post #25 of 58
Ugh. I think I'm pretty unhappy about this, too. Both companies have software that competes, has loyal followings, and does things differently enough to appeal to different people. Merging the two companies will undoubtedly result in the loss of some of that competion which helps products from both companies get better.

OTOH, will some other company rise up and take Macromedia's place? There certainly must be sleeper software out there that can take advantage of being "not Adobe". Maybe Canvas? Or can Corel step up to the plate? (It'd be nice to see Corel start hiring some Mac programmers.)

IMHO, Photoshop and Dreamweaver are so popular (in part) because they are defacto standards. The old "nobody gets fired for buying IBM" cliche. Now that the Macromedia "standard" is gone, who will rise up and be the default alternative to Adobe? Who will be the anti-Adobe in the Web design space?

On a different note, I really hope Adobe XML-izes Flash and adds more support for SVG. Rather than going the other way and saying, "Whew! We finally own Flash. Now we can drop SVG."

- Jasen.
post #26 of 58
AdobaMedia proudly presents new product names:

GoWeaver
DreamLive
GoLiveWeaver

FreeIllustrator
IllustratorsHand
InFreeDesignHand
InHandDesign

FlaMotion
LiveFlashMotion

FireReady
ImageReadyWorks
St. Elmo's PhotoShopFire
post #27 of 58
LiveMotion has been dead for years.
post #28 of 58
Ironically, the only way for Apple to keep certain big players on their platform is now for them to go head to head against them.
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post #29 of 58
Quote:
Originally posted by Tazznb
Now watch Microsoft try and force a buyout of Adobe. This Adobe thing sucks, but the M$ thing would massively suck!!

Don't be bloody stupid.
post #30 of 58
Quote:
Originally posted by Hobbes
Adobe isn't moving away from the Mac nearly as fast as Macromedia was, though. So that flavor of gloom-and-doom doesn't make much sense to me. What is unsettling is seeing a new monopoly in creative software form right before our eyes.

And it does look like Adobe and Apple are increasingly becoming competitors. To say the least.

Hiya Hobbs,

What i meant by my post which was done in haste was to say that Adobe already has serious issues with the management at Apple especially when apple announced FCP way back a market which Adobe thinks it has a god given right to be the monopolistic provider to. As for Macromedia although they were aslo getting less mac friendly as witness by even their tech support docs ( funny how all those screen caps are done off windoze) At least their major output was HTML / CSS and Actionscript a javascript like language. But Adobe... Hmmm one thinks they see themselves as the MS of the Studio. But its funny how many designers hate that approach. Im going back to BBedit. I guess its ironic Macromedia getting "consolidated" just like they did to Alliare...
post #31 of 58
Macromedia's management sucked, their marketing sucked, OSX support was a joke; Director, originally Mac-only and one the most useful and powerful programs ever (and one that provided me with a living for three years) has just been allowed to wither and die; pricing policies were ridiculous etc etc...

Whatever the long term consequences of an Adobe monopoly, and frankly the jury will be out for some time (did they ever really compete?), Adobe consistently delivers stable and functional programs.
post #32 of 58
for all of you who think this sucks, ponder this; what if it was microsoft that had purchased macromedia instead of adobe. now that, my friends, would have truly sucked. i believe that most of the macromedia lineup will remain intact with the exception of freehand. most of the mm products are far superior to their adobe counterparts.

dreamweaver is strongly intrenched where as golive has never really caught on and has been in decline for years now. if anything some of golive's functionality will move to dreamweaver.

fireworks is more comparable to imageready than photoshop. one of them will get the ax, my guess would be imageready since it kind of pales in comparison.

flash is going no where. and for those thinking that this may give a boost to svg, i wouldn't count on it. adobe supported svg as a way to compete with flash. now they have flash they really don't need svg.

freehand is gone. to bad. i started out on freehand back in the 5.5 days. i doubt they spin it off. why would they want the competition for illustrator? r.i.p.

coldfusion in adobes hands is very intriguing. this will be interesting to watch. same goes for contribute.

not sure what they will do with the rest of their web services offerings. they may leave it out there to see how it does only to let it die if it under performs.
post #33 of 58
photoshop has pretty much gotten better and better, illustrator CS is a bit buggy (I havent messed with CS2) but macromedia on OSX blows! Hopefully tiger or adobe can fix the glitches...
post #34 of 58
Quote:
Originally posted by Matsu
Ironically, the only way for Apple to keep certain big players on their platform is now for them to go head to head against them.

a lot of truth in that statement. Apple has no leverage anymore with Adobe owning everything. They'd better start polishing some of those skunkworks projects because Adobe can knife any product they like siting poor Mac support.

Sigh..this is exactly where I didn't want this industry going. I guess Kelby was right to devote Layers Magazine to Adobe.
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post #35 of 58
Quote:
Originally posted by running with scissors
freehand is gone. to bad. i started out on freehand back in the 5.5 days. i doubt they spin it off. why would they want the competition for illustrator? r.i.p.

Last time, they spun it off because they had to. If they killed it, they would have had a monopoly. I'm not sure it's any different, now.
post #36 of 58
Anyone know the breakdown on Adobe CS sales for Mac vs Windows?

I heard somewhere that Mac sales of CS account for 45-50% of total sales still. I can't see them giving Mac the finger and losing half their base.
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post #37 of 58
Quote:
Originally posted by MrSparkle
Last time, they spun it off because they had to. If they killed it, they would have had a monopoly. I'm not sure it's any different, now.

not totally true. although there was an investigation by the ftc, there was a clause between aldus and altsys ( the original developer of freehand) that development and marketing must be continued with freehand. altsys sued adobe and eventually freehand turned back over to altsys whom eventually sold it to macromedia.
post #38 of 58
Quote:
Originally posted by running with scissors
for all of you who think this sucks, ponder this; what if it was microsoft that had purchased macromedia instead of adobe. now that, my friends, would have truly sucked. i believe that most of the macromedia lineup will remain intact with the exception of freehand. most of the mm products are far superior to their adobe counterparts.


This is what I think the CS3 lineup will be:

Adobe Photoshop
Adobe Imageready - incorporating some Fireworks features
Adobe InDesign
Adobe Illustrator - incorporating any Freehand features not now in Illustrator
Adobe Acrobat
Adobe Flash - new Adobeized interface
Adobe Dreamweaver (yes, thats right) - completely rewritten with a new Adobeized interface, many GoLive features (such as the layout grid) incorporated


Other Apps:

Adobe Director
Adobe Contribute
Adobe ColdFusion (not part of CS3)
Adobe Flash Player (my guess would be that this probably why Adobe bought MM more than any other reason)

The handwriting has been on the wall for quite some time as far as SVG is concerned. The installed user base for the plugin pales in comparison to the Flash user base. I fully expect Adobe to discontinue their SVG support once Flash becomes theirs.

Just my 2ยข
post #39 of 58
Quote:
Originally posted by 4fx

Adobe Dreamweaver (yes, thats right) - completely rewritten with a new Adobeized interface, many GoLive features (such as the layout grid) incorporated

This is one of my biggest fears. GoLive created the crappiest HTML code ever, completely f'd-up and unusable. Dreamweaver wasn't perfect, but it did a much better job and needed less massaging after the fact. I fear GoLive's DNA will effect Dreamweaver, and it will turn into an "ease-of-use, mass market hobbyist" product instead of trying to be a professional tool.

That, and I liked FlashPaper, which is almost certain to get the axe.
post #40 of 58
Any takers on when CS3 will hit the shelves?
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