Corel buys up MetaCreations apps

MetaCreations also announced that it has sold Carrara, its 3D modeling, rendering and animation software, to Adobe Systems Inc. (adbe), which recently acquired Canoma, another MetaCreations product. MetaCreations is still seeking a buyer for Poser, a 3D character-animation tool.

"Painter and KPT are perfect complementary additions to Corel's professional graphics lineup," said Corel spokeswoman Meredith Dundas. "Bryce has a broad appeal and will have much added value in our lineup of graphics products."

However, she said that MetaCreations' other products, Poser, Carrara and Canoma, "did not fit as well into Corel's core competencies in the image-editing and creation market."

Corel (corl) declined to disclose the terms of the deal, but said the information would be revealed in the companies' respective Form 10Q filings with the SEC.

MetaCreations said last December that it would divest its graphics software to focus on Metastream, which allows online retailers to present realistic 3D models of their products. At the time, MetaCreations wouldn't say which programs would be put on the auction block, but in February the company announced that it would divest all of its packaged software.

Corel's acquisitions include Painter 6, a natural-media painting program; Bryce 4, a popular 3D landscape generator; Kai's Power Tools 5 and 6, a series of Adobe Photoshop filters; and KPT Vector Effects 1.5, a set of Adobe Illustrator plug-ins. The deal also includes three other Painter-related products: Painter Classic, Painter 3D and Art Dabbler.

Carrara, a new mid-range 3-D graphics program that now joins the Adobe product line, combines features from the earlier Ray Dream Designer and Infini-D packages.

In addition to complementing CorelDraw, the company's flagship illustration package, Dundas said Painter will also be a strong companion for Photo-Paint, an image-editing program that competes with Photoshop.

Corel, known for its practice of bundling multiple graphics applications into relatively low-cost software suites, will continue offering its new acquisitions as stand-alone products. "They are already extremely well-branded in the marketplace as stand-alone applications," Dundas said. "The current releases will be repackaged in the near future to reflect Corel ownership, but the changes will be minor in order to retain customer recognition."

Corel said it has contracted Painter creators Mark Zimmer, Tom Hedges and John Derry to assist in the transition and that it plans to contract additional MetaCreations engineers to help with product development. However, the company plans to move software development from MetaCreations' two California locations to Corel's Ottawa headquarters. MetaCreations announced that Bob Rice, who heads the Metastream joint venture with Computer Associates (ca), has replaced Zimmer as MetaCreations CEO.

Corel will handle all customer service and technical support for the programs beginning July 1, although it will offer some technical support as of May 20. MetaCreations will continue to handle service and support until Corel assumes those responsibilities.

Corel has long been a force in the Windows market with its CorelDraw suite, which includes Photo-Paint image-editing software and CorelDream 3D software in addition to the core illustration program. The company claims to have an installed base of about 5.2 million CorelDraw users in the United States.

However, the company has not been able to match its PC success among Mac users. Corel made its first serious foray into the Mac market in 1996 with CorelDraw 6 for Power Macintosh, but that first Mac release suffered from numerous bugs and failed to dent Adobe Illustrator or Macromedia FreeHand. CorelDraw 8, released in 1998, was generally well-received by reviewers but again failed to win converts from Illustrator or FreeHand. The publisher released CorelDraw 9 and Photo-Paint 9 for Windows in March 1999, but has yet to announce Mac versions.

"We understand the lack of upgrades to the Mac version of CorelDraw may look like we're not supporting the platform, but that's not the case," Dundas said. "Corel is definitely committed to the Mac platform." In addition to contracting with former MetaCreations' engineers, she said that Corel has set up a dedicated Mac development team.

Dundas noted that the MetaCreations products "are extremely well-branded and well-known in the Macintosh community," theoretically giving Corel more incentive to support Mac users.

She added that Corel continues to work on a new Mac version of CorelDraw and pointed to recent Mac releases of its consumer/SOHO-oriented Corel Print House and Corel Print Office as signs of the company's Mac commitment.

Corel's acquisition raises the possibility that Painter, Bryce, and KPT might be ported to Linux. Corel Linux OS is a popular Linux distribution for Intel PCs, and early this year, Corel announced that it will offer Linux versions of WordPerfect Office 2000, CorelDraw and Photo-Paint. At the February Cebit show in Hannover, Germany, Corel teamed with S3 to demonstrate a 3D graphics driver for Linux.

"We are always looking at products that could fit into our Linux plans," Dundas said. "KPT and Bryce, in particular, were developed to be platform-independent and would be straightforward to port." However, she said "there is no confirmed date" for any Linux releases.

The acquisition comes at a challenging time for Corel. After earning profits in fiscal 1998 and 1999, the company reported a $12.4 million loss for the first quarter of this year and said that it expected to see similar losses during the next two quarters. Last October, Canadian authorities charged Corel CEO Michael Cowpland in an insider-trading scheme involving Corel stock; Cowpland has denied the allegations and the case is awaiting trial.

The deal ends a long journey for MetaCreations, which through a series of mergers and acquisitions picked up five previously separate companies in 1997: MetaTools, Fractal, Ray Dream, Specular and Real Time Geometry.

Now that it has divested its graphics packages, MetaCreations will focus on Metastream.com, a joint venture with Computer Associates in which it holds an 80 percent stake. The company plans to license the technology to interactive and traditional ad agencies, which will then resell it to large Web-based retailers. Online retailers can use the technology to present 3-D models of products available for sale. The company announced Metastream 3.0, the latest version of the technology, during a recent press conference in New York.