Adobe to Acquire Macromedia

David Schatsky | April 18, 2005, 08:46 AM

In an acquisition that has been long bandied about, Adobe announced today that it would acquiare Macromedia in an all-stock transaction valued at around $3.4 billion. Adobe has been on a tear for the last several years as it has successfully pursued a stategy to capitalize on the ubquity of Acrobat to penetrate deeply into enterprises to tackle their knotty document management and workflow challenges.

At the same time, Macromedia also had success in capitalizing on the ubiquity of Flash to identify and embrace new communities of users in the professional Web development and design community.

Acquisitions of this scope are always a vast challenge. But the executives at both companies I have met over the years have are highly capable and possess real vision. They will need to executive very well to maintain their track records of satisfying their existing customers as they mine the combine for cost savings and ultimately, additional strategic advantages.

The execs are pretty vague so far about the benefits of the merger, giving top billing to cost savings, including by channel synergies to lower the cost of sales. They also alluded to the importance of mobile applications and cited Macromedia's greater presence there as an advantage to the combined company that can help pull Adobe's technology onto a new platform.

This one is going to be fun to watch. Let's also see what sounds come out of Redmond.