Adobe Acquires Macromedia for $3.4 Billion

Adobe Aquires Macromedia

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Adobe to aquire Macromedia

Any and all graphic designers, web designers, or anyone who has Adobe or Macromedia software installed on their computer will be interested to know that Adobe Systems, Inc. has set the wheels in motion to acquire Macromedia Inc. in an all-stock transaction valued at $3.4 billion. Adobe's CEO said

"This is not a consolidation play. This is all about growth...We are doing this because we believe the combined offerings will be even more compelling to our customers given the challenges they're going to face in trying to communicate information in this complex environment."

This transaction is still contingent on the approval of government regulators and the shareholders of both companies. The combined company will still go by Adobe Systems, Inc. and be located in San Jose. The terms of the deal will give 0.69 shares of Adobe common stock to Macromedia stockholders for every one share of common stock. This would give Macromedia stockholders about 18 percent ownership in Adobe when the deal finishes.

Many of us in the design world are going to be very nervous to see if they consolidate competing products. Will all of the Freehand users need to learn Illustrator? Will Photoshop users need to abandon their coveted Photoshop for Fireworks? In the area of design, everyone has a favorite and this will surely end in some people needing to learn a new software package. Whether they combine their forces and create an even better software, or just dump the other versions to remove competing programs, it will be interesting to watch and see where the new company will lead the design community.

Pariah S. Burke of and Quark VS Indesign made the following predictions:

  • Dreamweaver and GoLive will continue as independent products for the foreseeable future.
  • Macromedia stopped developing Freehand two years ago, so that will not be updated by Adobe either. In Illustrator CS3, Freehand's tight integration with Flash will be brought home into Illus.
  • Flash will be split into two separate apps--a developer platform and a creative platform. Adobe's After Effects, which has most of the creative functionality of Flash, will be scaled back to less of a Flash competitor and more of a complimentor. Flash and After Effects will wind up with overlapping tools, but their own distinct purposes, very much like Photoshop and Illustrator.
  • FlashPaper will get a boost by integration with Adobe's (Accelio created) PDF server technologies.
  • All Macromedia products will be reworked to include heavy support for SVG, native Adobe formats (PSD, AI, PDF, etc.).
  • FireWorks will survive as a consumer/prosumer product for a year, then be replaced by Illustrator Elements.
  • RoboHelp, a huge competitor and complimentor to Adobe's FrameMaker, will be tightened into FrameMaker, enabling Frame to, for the first time, write once and publish to all media without the need to license out to hack software like Quadralay WebWorks.
  • With Macromedia's website dev tools (Contribute, ColdFusion, etc.), look for an Adobe Web Development Collection (ala the Video Collection) that includes them, Illustrator, and Dreamweaver.
  • All the other industry analysts will mention the failure of LiveMotion at least 3 times each.
  • HomeSite will be officially killed (Macromedia unofficially killed it already), leaving Nick Bradbury free to beef up TopStyle Pro into a fully functional code editor with all the bells and whistles he initially built into HomeSite.
  • Corel will offer to sells itself to Adobe, at which Adobe will laugh. Ultimately Corel will drop its creative software and focus entirely on its hockey team.
  • And, last but not least, Quark will go bye- bye.