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Larry Dignan, Andrew Nusca and Rachel King
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Adobe-Microsoft meeting morphs to merger rumor

By | October 7, 2010, 12:58pm PDT

Are Adobe and Microsoft plotting a merger? That’s the leap some folks are making. It’s amazing what a meeting between the CEOs of Adobe and Microsoft can do to shares.

The New York Times Bits blog reports that Microsoft CEO Steve Ballmer recently met with Adobe chief Shantanu Narayen at Adobe’s corporate offices.

This meeting lasted roughly an hour, but a lot of the focus was on the mobile market and Apple’s hammerlock on the industry. Adobe has bet big that Flash can be distributed via Google’s Android operating system.

Now these talks could have just been a powwow on how to thwart Apple (an enemy of my enemy is a pal thing). Or this meeting could become a full-blown merger. The truth is likely to be somewhere in the middle.

The good news—for Adobe’s investors today—is that the company is a little more valuable than it was just an hour or so ago. Look at that volume and price pop.

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Topics

Adobe Systems Inc., Merger, Microsoft Corp., Mergers & Acquisitions, Investment, Finance, Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic.

Disclosure

Larry Dignan

Larry Dignan has nothing to disclose. He doesn’t hold investments in the technology companies he covers.

Biography

Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

For daily updates, follow Larry on Twitter.

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RE: Adobe-Microsoft meeting morphs to merger rumor
jackson1984-24316069205748857739440257893812 10th Oct
Your web page may be very attention-grabbing. I am loving all a single in the aspects you transpire nfl football jerseys to become sharing with each individual particular person!
View in thread
0 Votes
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Is Microsoft looking to collect more patents?
itpro_z 7th Oct 2010
Besides having some interesting software, doesn't Adobe have a decent patent library?
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Remember a few months ago
John Zern 7th Oct 2010
that phot of Jobs and Schmdt having coffee together?

Merger, perhaps? wink
0 Votes
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Bad deal if they buy growthless Adobe
LBiege 7th Oct 2010
MSFT share holders should veto it.
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it won't happen
Linux Geek 7th Oct 2010
@itpro_z
too much product overlap and antitrust issues!
0 Votes
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Nooo - Microsoft will suffocate Adobe! Google?! Help!
zibarts@... 7th Oct 2010
I hope Not... I'm an Actionscript Developer, and I'm not too fond of Microsoft. It drained Yahoo, and hardly makes innovative moves.

I'm afraid for Adobe. I'd prefer a Google-Adobe merge.
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Drained Yahoo?!?
ericesque 7th Oct 2010
@zibarts@...
Yahoo hasn't done ANYTHING to help themselves in recent history. They're the Novel of the interwebs. They just kicked back and started riding out their market share till it eventually bottoms out.
0 Votes
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This is the End of Silverlight
gjafg 7th Oct 2010
Microsoft has long tried to get its hands on Flash.

Microsoft wants to own Adobe so that it can own Flash. Why? Flash is much more dominant than Silverlight is, which Microsoft envies. If Microsoft acquires Flash, as it is trying to do, then that spells the end of Silverlight.

Sorry Silverlight developers.
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RE: Adobe-Microsoft meeting morphs to merger rumor
LiquidLearner 7th Oct 2010
@Market Analyst

They wouldn't drop silverlight. If anything Flash would be killed off. Silverlight is a direct extension of existing Windows programming, so you have tons of developers that can write apps for it.
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You're scared, right?
OS Reload Updated - 7th Oct 2010
After all the effort you invested to learn as much as you could to chase Microsoft's moving targets (silverlight and all the immature garbage associated with it...)

Poof!

All gone to waste. Silverlight is dropped and Flash prevails.

It must be hard, I can understand why you're feeling scared. Anyone would feel scared if in your dire straits.
0 Votes
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haha! If you're going to try to get under someone's skin...
ericesque Updated - 7th Oct 2010
@OS Reload
at least veil the attempt thinly. You gave away the fact that you haven't a clue what you're talking about when you called Silverlight immature. Aside from market share Flash hasn't a single leg up on Silverlight.

No, I suspect that if Microsoft were to acquire Adobe, they'd simply kill off the Mac version of CS. See, that's when you get scared-- because

Poof!

OS X is history.
0 Votes
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Actually, you sound like the scared on
John Zern 7th Oct 2010
here it is another MS related article, which you believe threatens the competition, and you're is right there, saying anything to trying to re-assure yourself it isn't happening

I agree, it must be painfull for you that MS isn't dying, and that things never work out the way you want them to.

Now go take something to calm your nerves. happy
0 Votes
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Inertia and in all likelihood...
zkiwi 10th Oct 2010
The EC would disagree with you on the "drop flash" option. Weren't you among those decrying Apple's lack of flash support on the iPad (and whatever else)? Are you now being "Mr. Hypocrite" now that you think Microsoft might acquire Adobe and you want them to drop flash?
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LOL! You have to be a joke, MA!
John Zern 7th Oct 2010
Seriouslly, no-one can be so far off the truth on anything MS related asa much as you, unless it's deliberate!

Sorry Market Analyst, the gig is up! sad
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I would concur
Mister Spock 7th Oct 2010
Mr. Zern. There is very little to what this gentleman says that would make me believe he is telling us anything truthful.
plain
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Please GOD no! Microsoft needs Adobe like a bullet in the head
Johnny Vegas 7th Oct 2010
MS has already outdone flash is just a couple of years. Adobe really has nothing significant to offer. I would bet this meeting only has to do with WP7. Adobe can target their dev tools for it so the people for whom VB is still way too advanced can make their little apps that move bitmaps from one side of the screen to the other....
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RE: Adobe-Microsoft meeting morphs to merger rumor
Loverock Davidson 7th Oct 2010
I seriously doubt Microsoft would buy Adobe. They were probably talking about creating some new fonts.
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And who told you it would be Microsoft buying Adobe?
OS Reload 7th Oct 2010
Adobe buying Microsoft is an equally viable option given the way things are going in redmond.
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You know that is another lie
John Zern 7th Oct 2010
OS Reload, so why even bother?

Do you really know how childish you look anymore, or doesn't it matter as you hide behind your screen name, posting what you're paid to post?
0 Votes
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*sigh*
zkiwi 7th Oct 2010
You're as sad as NonZealot.
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My guess is it is something about how to make flash not
frgough 7th Oct 2010
suck on Winmobile 7 as badly as it does on Android.
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RE: Adobe-Microsoft meeting morphs to merger rumor
computerchipt 7th Oct 2010
Does that mean we are going to have to learn to code for Flashlight? Sorry couldn't resist.
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Here are the possibilities
jinishans 7th Oct 2010
1) M$ buys Adobe and make Silverlight (XAML) & Flex (MXML) both output swf, so that M$ can use both C#/VB/AS developers & Flash Designers to develop applications for WP7

2) Once they do the above, say in 3-6 months, Flash will run both Flex & Silverlight files in WP7, Android.

3) Then, Flash can be used to sell Ad's in both WP7, Android

4) As already Apple relaxed it's rules, M$ can release Flash/Silverlight App development and integrate it with VS.NET, so that instantly iPhone app's development platform will be Windows again.

5) M$ get's revenue from Photoshop, Adobe products from all platforms

6) M$ can then dictate Google how a lesson and put a full stop in making Ad revenue in Mobile space

Flash would become de-facto for Mobile for next 10-20 years, like IE for PC all these years.

Nice strategy.

Regards
jinishans
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Or Apple could just buy adobe outright
frgough 7th Oct 2010
(market cap 14.88 billion) with about 30% of their cash reserves (40 billion)
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Than Apple, M$ may need Adobe, especially Flash to dominate Mobile Ad's
jinishans 7th Oct 2010
@frgough

Apple is not a s/w company, they're not good at it. They're a product Co. Also, than Apple, M$ needs Adobe, for Flash, due to their penetration in PC's, can be on WP7, already penetrating in Android.

Moreover, M$ want more s/w products for revenue/growth in consumer/ad space. It may be a plan by both Apple & M$ to get Adobe on board, to kill Google's Ad pitch in Mobile platform.

See the suites. M$ is suing only Android phone manufacturers.

Here Apple's iPhone is already stagnating. M$ will use Flash to develop app's in all 3 platforms and will be the winner, won't loose the Ad platform in Mobile space to Google.

Google won't get any revenue from Android, as Eric told couple of days back, the revenue is going to be from Ads in Mobile, which is what is getting targetted now by M$, Adobe & Apple in the background.

Also, M$ licensed ARM, so, they can put Flash in each ARM chip.
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RE: Adobe-Microsoft meeting morphs to merger rumor
gregnewm7 7th Oct 2010
Ballmer wants Adobe to do some things for Microsoft and the best way to get them done is to have high level talks. what Ballmer should realize about making the windows phone 7 a success is not try to beat other products but instead work to make your product great. quality always speaks for itself. there are so many people buying smart phones Microsoft will without doubt get a piece of the pie
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Waste of money
Alan Smithie 8th Oct 2010
HTML5 will make flash much less important.

I just can't see decent shareholder value from this one and it's just throwing money down the drain.
0 Votes
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More than Flash
voyager529 8th Oct 2010
@Alan Smithie

Adobe's major products include Acrobat, After Effects, Indesign, Illustrator, Dreamweaver, and Premiere. Their full product list is a mile long, and yes, even includes some cloud computing products - and this doesn't even include the mountain of patents they're sitting on (remember, Flash came from their purchase of Macromedia).

Also, don't forget that Flash is a development product whose next version could just as easily spit out HTML5 as it could Flash code.
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RE: Adobe-Microsoft meeting morphs to merger rumor
ellentr 29th Mar 2011
I hope it happens--adobe could learn a lot from the support offered by microsoft. My CS3 just stopped and support is nonexistent. Microsoft would never let that happen with its products
0 Votes
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RE: Adobe-Microsoft meeting morphs to merger rumor
jackson1984-24316069205748857739440257893812 10th Oct
Your web page may be very attention-grabbing. I am loving all a single in the aspects you transpire nfl football jerseys to become sharing with each individual particular person!

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