Macromedia to merge with Andromedia

Collaboration will allow customers to build in business logic at the authoring level

Macromedia, launched a new eBusiness Infrastructure strategy Thursday with a merger with Andromedia, and partnerships with BroadVision and USWeb/CKS.

Macromedia said its new eBusiness Infrastructure software will allow businesses to collaborate more efficiently, reduce time and resources to site deployment, and lower costs. "As our developers for Dreamweaver, Flash and Shockwave have become more successful, they have needed a more complete solution to realise their vision," said Kevin Lynch, senior vice president and general manager for Macromedia in a company statement. He said the new combined software will allow customers to "build in business logic at the authoring level."

Shares of Macromedia, which have been on an upward spike since the company reported first quarter results in July, closed at 54 31/32 Wednesday, approaching their high of 55. USWeb/CKS closed at 31 5/16 Wednesday, and BroadVision, closed at 161.

Macromedia's merger with Andromedia will add its eMarketing software to Macromedia's publishing software. "Andromedia and Macromedia's products already complement one another and are used jointly by many of our customers,'' said Kent Godfrey, CEO of Andromedia, who added that the deal provided a "complete eBusiness Infrastructure" that would cut costs for businesses that are "tired of having to knit together a hodgepodge of point solutions from multiple vendors."

Andromedia is a privately held company based in San Francisco. Macromedia will acquire all of the outstanding stock of Andromedia in a stock for stock merger. Macromedia expects to issue about 5 million shares of stock in connection with the acquisition and incur one-time charges for the deal of up to $5 million in its fiscal third quarter.

Kent Godfrey, Andromedia's current chief executive, will join the senior management team at Macromedia where he will be responsible for strategic e-business initiatives.

Under Macromedia's alliance with USWeb/CKS, USWeb/CKS will use Macromedia's eBusiness Infrastructure to enhance its Internet-based software. Macromedia and USWeb/CKS will also collaborate on future developments, Macromedia will provide sales, marketing and training support to the USWeb/CKS team. Financials of the deal were not released.

BroadVision, which makes personalised e-business applications, said the its "One-To-One" application suite will become the first integration platform for Macromedia's new software. The deal is an extension of the companies' existing relationship.

Macromedia also announced Project Whirlwind, a plan based on advanced technology licensed from Starbase which will allow for content management and collaboration. Macromedia's Project Whirlwind will be introduced to market next year.