Adobe Systems Incorporated (Nasdaq: ADBE) has announced a definitive agreement to acquire Macromedia (Nasdaq: MACR) in an all-stock transaction valued at approximately $3.4 billion. Under the terms of the agreement, which has been approved by both boards of directors, Macromedia stockholders will receive, at a fixed exchange ratio, 0.69 shares of Adobe common stock for every share of Macromedia common stock in a tax-free exchange. Based on Adobe’s and Macromedia’s closing prices on Friday April 15, 2005, this represents a price of $41.86 per share of Macromedia common stock.
A statement in the press release for Adobe reads:
The combination of Adobe and Macromedia strengthens our mission of helping people and organizations communicate better. Through the combination of our powerful development, authoring and collaboration tools – and the complementary functionality of PDF and Flash – we have the opportunity to drive an industry-defining technology platform that delivers compelling, rich content and applications across a wide range of devices and operating systems.
By combining the passion and creativity of two leading-edge companies, we will continue driving innovations that are changing the ways people everywhere are experiencing and interacting with information.
John Kennedy reports for SiliconRepublic.com, “Bola Rotibi, a senior analyst with Ovum commented: ‘This acquisition is major news for the software industry, although not altogether surprising. Macromedia has regularly been seen as a prime candidate for acquisition. The deal itself is not without issues from a competition standpoint since the resulting business will almost certainly hold a sizeable chunk of the GUI market that would make it difficult for some smaller vendors to play in. The companies have overlapping product sets and a product portfolio that goes in many different directions. That is both a positive and a negative and will need to be addressed, going forward,’ Rotibi said.”
Kennedy reports, “Rotibi also warned that the transaction could result in anti-competition court cases arising from competitors’ inability to compete against what in effect will be a software juggernaut. ‘Adobe’s revenues are around $2bn and Macromedia’s are around $350m to $400m – the revenue potential of their combined market play and future potential is substantial. The compelling offering of a cross platform play that serves Microsoft’s own environment will make it a formidable competitor for the Redmond giant but we think it would have had trouble making its own bid for Macromedia on anti-trust grounds. Ultimately both Adobe and Macromedia both have superb cross platform technologies and if they can exploit the ubiquity of the PDF reader and Flash, and really emphasise the ‘any client anywhere’ theme they will be a in a formidable position to dictate industry directions for the future,’ Rotibi concluded.”
Full article here.
MacDailyNews Take: If approved, this deal would remove another strong competitor in the software space and leave an even smaller handful of major players. If fact, in the consumer software market, excluding games, only Adobe, Apple, and Microsoft immediately spring to mind as large companies that make a wide variety of software applications. Still, hurray at least for it’s tabbed palettes for everyone! So, what happens to Dreamweaver? Are we all going to be using GoLive soon?
This is grate! I love Macromedia but there programs don’t have that Mac feel like Adobes do. So hopefully this will fix that.
Yeah… apart from the fact that adobe never have had that great a relationship with apple!! they like dropping products for the mac and until recently charged more for the mac versions of their software than their pc counterparts.
I really hope they don’t scrap any of the new media side of programs, Adobe suck for those, where as macromedia rules… (dreamweaver, fireworks, flash, director).
I think that this is a good move for adobe but bad move for us that depend on software for a living! Macromedia have lead the web for years and adobe had lead print, I for one don’t think adobe can come up with the kind of things macromedia has for web development, otherwise they would have already!
The sky is falling, the sky is falling…
This is scary… Adobe is not as committed (other than Photoshop) to the Mac platform as Macromedia is. I was hoping that Apple would have acquired Macromedia eventually.
God I hope they don’t drop GoLive. It is lightyears ahead of Dreamweaver…
Anti-competitive and monopolistic in the extreme. Then again, competition doesn’t seem to have helped as Macromedia’s software couldn’t suck more in its most recent iterations. Both FreeHand and Dreamwweaver have headed steadily downhill since versions 5.5 and 2.0 respectively.
MDN magic word “test”: As in the sheer M$-like bloatedness, crash-proneness, and slow-ass performance of Macromedia’s MX versions of their software has severely TESTed my patience.
I find that this is a great opportunity if handled right. Adobe should integrate flash controls into Acrobat, to give Acrobat more interactive control and then use the better new media packages for design professionals and use the other ones for enterprise and home user solutions.
I use GoLive daily and would welcome any and all inovation that intigrating the Macromedia products could bring. I just hope this is not a repeat of the PageMaker/InDesign thing. InDesign still can’t open PDF files! They stop developement of PageMaker to improve the newly aquired InDesign but fail to make it so that it can open their own standard file format? That is just scary.
This is not good news for Apple or Macintosh users. This will do nothing more than reduce competition, product availability & variety. This will also make Apple more dependent upon a company that is increasingly a competitor, as Apple expands it’s software operations.
I’m sorry, this sucks. Macromedia was the only serious competitor to Adobe in a number of major products. Note the press release focuses on Flash, but what will happen to other Macromedia products like FireWorks, DreamWeaver, or even Freehand?
Admittedly, I prefer BBEdit and Adobe GoLive to DreamWeaver, but I acknowledged that DreamWeaver’s popularity kept both products growing and gaining. And while Photoshop is a powerhouse, I HATE using it, unless I absolutely have to. To that regard, GraphicConverter and FireWorks have become my day-to-day image editing tools, because most jobs DONT NEED Photoshop.
I’d guess if FireWorks goes away, I could go back to Debabilizer, but still, what a massive blow for software competition.
Any chance this will get stopped on anti-trust grounds?
can anyone say “MONOPOLY”?
the lack of competition will be bad for everyone…
An opportunity missed.
Apple should have used some of its $7 billion in cash, and $25 billion + in share valuation to take Macromedia and kept Adobe honest.
This sucks. What next? Adobe acquiring Quark? I love Adobe products, but this smells like a Microsoft move. Apple better have some secret Creative Suite killer under wraps and ready to release at a moment’s notice in case Adobe decides it’s just not worth developing for 2 platforms. On the other hand, Adobe needs Apple to help keep Microsoft at bay. If they were to stop developing for the Mac, Microsoft would have much more leverage.
I think this is great news!
Adobe will merge macromedia’s web suite into the adobe CS suite of apps.
I also think the firsy thing they will do is drop Freehand – which to be honest was crap compared to illustrator.
I predict Adobe will release in 2006 Adobe CS 3: Complete media edition. This will include: Photoshop, Illustrator, Indesign, Flash CS, Go-live CS (with all the features taken from dreamweaver).
With all this software in it’s arsenal, quark is basically dead.
I like both Adobe and Macromedia. But this is kind of scary. Competition keeps companies innovative. Besides that, Adobe and MM both have their own stars. I love Photoshop and InDesign and Illustrator, but hate GoLive. I like Dreamweaver and Flash, and would hate to see them nixxed. It wouldn’t hurt my feelings any to see FreeHand scrapped. It will be interesting to see how this pans out.
If Adobe doesn’t ruin Macromedia’s stuff, it’ll definitly overcharge for whatever it releases as “their” version of it. It’ll probably kill off Freehand ’cause of Illustrator. I don’t know too many people using it these days anyway. I used to love it. It was easier to learn and use than Illustrator. An ignoble death indeed. And DreamWeaver? Who knows what the child of it and GoLive (which they also bought) will be? The only guarantee: more expensive for the consumer. Too bad, I think.
MCCFR:
Uh.. which would.. kill Adobe support for the Mac.. as well (because of competition)
Either way, if all these companies are allowed to merge, you’re going to be tangled in so many conflicting interests that there will cease to be any true third party developers (hyperbole of course, but you get my drift)
If MS buys all it’s third party developers to keep them away from Apple, then.. well, they’re now 2nd party.
Adobe getting together with Quark is more interesting because, they do offer some different things. So instead of.. let’s merge we can own t his market.. it’s.. let’s build one company that is very good, but also very broad. That’s impressive.
Adobe has already said it gets about a third of its revenue from the Mac platform.. that’s quite a bit of dough to throw away just because you resent competition.
Childish? Yup. Farfetched? Ah, no..
Oh so now the “tabs” will be used by both companies (lawsuit). Whoopee!
I hope that the antitrust people take a good look at this one.
What about ColdFusion???? What happens to that??
Can you say oil industry-type price increases?
Perfectly said……
“An opportunity missed.
Apple should have used some of its $7 billion in cash, and $25 billion + in share valuation to take Macromedia and kept Adobe honest.”
Finally…Freehand dies. Fireworks…not far behind.
And as usual – hundreds lose jobs.
Gotta love these acquisitions.
Mike:
Not really, because Adobe has long since stopped treating the Macintosh as anything other than a “design & print” platform with the exception of GoLive.
Where is Premiere, or the DVD app, or Atmospheres, ro Adobe Graphics Server for the Mac? Nowhere.
Whereas Macromedia is now pretty much a New Media company, with some nice additional assets.
MDN’s take would obviously be completely different (i.e. ecstatic) if it were Apple who had “remove[d] another strong competitor in the software space.”
Not Good. Especially from a designers point of view.
I can see FlashPaper 2 being of interest to Adobe but come on. Flash, Fireworks, Contribute, Dreamweaver, ColdFusion, (heck even Director and Freehand). I fear what will happen to these products. I’m sure it’s already been said, but Macromedia excels in web development. Adobe has no idea what they are doing in that arena.
Note to Adobe: don’t ruin Flash, Dreamweaver and ColdFusion. Don’t kill Macromedia’s versions of the duplicate programs.
I have bad feelings about this.
I agree with those that are concerned. This is very bad for Apple. At NAB this weekend Adobe was all over the place with Dell. This nmerger will mean fewer pro applications for the Macintosh and that’s very bad for Apple. Apple should have bought Macromedia years ago in 01-02 when it’s value was less.
This is a major blow to Apple.It’s an anti-competive move by Adobe, but the Justice Department is unlikely to care. They will approve the merger without any problems.But the reality is, anyone could have seen this coming. It was just a matter of time before Microsoft or Adobe gobbled up Macromedia.
http://www.ftc.gov/bc/hsr/hsr.htm
yea this isn’t exactly great news. I’m thinking what we’ll wind up with is a series of programs that combine the terrible Macromedia GUI with the pitiful reliability of the latest Adobe products. Crap + Crap = Crap
NNNNOOOOOOOOOOOOOOOOO.
What’s going to happen to ColdFusion and Jrun and all the other server products that make the internet tick? I like Adobe, but not that much – GoLive sucks. I’ve always preferred Freehand over Illustrator, Dreamweaver over GoLive, Flash over SVG. Ugh. This is just horrible. Photoshop, Acrobat and InDesign are my only preferred Adobe products. Ugh. This sucks.
re: transgeek
“I agree with those that are concerned. This is very bad for Apple. At NAB this weekend Adobe was all over the place with Dell. This nmerger will mean fewer pro applications for the Macintosh and that’s very bad for Apple. Apple should have bought Macromedia years ago in 01-02 when it’s value was less.
This is a major blow to Apple.It’s an anti-competive move by Adobe, but the Justice Department is unlikely to care. They will approve the merger without any problems.But the reality is, anyone could have seen this coming. It was just a matter of time before Microsoft or Adobe gobbled up Macromedia.”
If adobe does drop these apps for the mac platform then Apple will just create their own web suite!
This is exactly what they did when adobe dropped Premier et al for the mac.
Apple basically stuck 2 ‘fingers’ up at adobe and just developed final cut pro, dvd studio pro, motion and shake – which are now the standard apps in the movie industry.
Even the BBC use final cut pro for ALL their video post production.
I see nothing to worry about.
I think this sucks. I like Adobe fine but I also really like macromedias products. Both companies helped to push forward UI ideas. Now we are stuck with one way the Adobe way and nobody but a bunch of tiny players to compete.
I think the worst trend in software right now is the F-in Suite. They make the cost of individual products prohibitively expensive to push you to buy the suite which is prohibitively expensive.
I hate powerplays by already healthy companies. I like variatey in my apps/ I like Quark for layout. I like Photoshop and Illustrator for graphics. I love Flash, dreamweaver, and firworks for the web. I like each of there interfaces in different scenerios so the thought that everything would be the same annoys me.
Apple used to have a pretty decent WYSIWYG editor back in the day – Claris Home Page. Maybe it is time for them to revist that program, update it, and try to capture the market that is pissed about this merger.
For the Adobe bashers – Adobe ONLY dropped Premier for the Mac. And the reason they did that was because FCP was kicking its ass. Do not be alarmists and think that Adobe has ANY intention of going with Windows only. Never happen.
For the Freehand bashers – FU! In the 9 years I have used BOTH Illustrator and Freehand side by side, Freehand kicks Illustrators ASS – EVERY TIME!! You folks need to stop sucking Adobe’s teat. The only thing that is good for is Photoshop.
this is not good at all. I use both Illustrator and Freehand in my daily workflow – none of these apps are perfect but neither would have been what they are without the competitor. Freehand has the best/fastest modeling/work setup whereas Illustrator has the most exact tools ie. finishing setup. If Freehand gets ditched in favor of illustrator, I know quite some masses of big-name designers who’d run havoc. The only possitive outcome of this should be:
*Flash might someday get an interface/workflow that doesn’t suck
*Freehand tools might end up being more consistent/exact
*Fontographer might get updated (how many years is it now?)
*Flashplayer might get recoded for OSX – y’know…it’s not really as fast as under Windows
However, I’ve completely given up on the thought of efficient code. You guys remember Freehand 5.5? The fastest ever…and almost no bugs.
Same could be said of Photoshop. Damn do I miss Live Picture! 🙁
Apple bought Final Cut Pro from Macromedia years ago.
GoLive better get the knife and not Dreamweaver. Macromedia has always been a better company in my opinion to the Apple crowd than Adobe has been in the last 10 years.
re: Frenchie
Apple bought Final Cut Pro from Macromedia years ago.
Either way – Apple has moved it forward and have turned it into the best video suite out there.
Just look here – If you anything about video tou will cream your shorts!!!
http://www.apple.com/finalcutstudio
This just sucks, there is no other way of putting it. Adobe is GREAT at imaging as in PhotoShop, clearly the masters of the universe in that category, no doubt about it. On the other hand, Macromedia’s Dreamweaver is much preferable over GoLive from a web developing standpoint, let’s face it, Adobe are the print masters and Macromedia the Web Experts. I fear that they’ll drop some products or combine some and the outcome will leave a lot to be desired. Last, not least, Macromedia’s software was always much more affordable than Adobe’s and that’ll change,too, just about guaranteed. Let’s hope for a miracle that this merger will not happen!
Here is a story:
When printing from an early version of Adobe Acrobat Reader for OSX, you could Print (save) as PDF. In subsequent versions, Adobe disabled this feature. Why? Because this would enable Mac users to save as pdf a fillable form without purchasing the standard or professional version of Acrobat. They intentionally disabled a feature of the Mac OS X operating system in their pripoduct because it was by-passing the need for another lucrative Aodobe market. You could download a fillable pdf form, fill it out and print (save) it to pdf. Now you can’t.
hmmm…
Terrible news. This merger must be stopped. Otherwise it’s goodbye Freehand, goodbye Dreamweaver, goodbye competition.
Macromedia has always been a good competitor for Adobe and is to thank for the highly developed software we have today. The only reason Adobe want this deal is to sweep away alternatives to its software.
Personally, I have found Freehand a far more usable application that Illustrator – it is (was?) more intuitive and more based around a real technical drawing environment.
A sad day, Apple should have bought Macromedia.
If Adobe abandons us, I hope that Apple will step right up and develop proffesional products for Print and Web media as they have done for Video.
Apple should counter-offer $3.4 billion in CASH.
Is it possible to set up a “Save Macromedia from Adobe” campaign? We’re just about to get half our everyday software titles removed from existence!
If Apple wants to offer a web design application they should forget about Home Page and acquire Freeway instead.
Over the course of the last 2 hours (every since I learned of this disappointing and perhaps devastating news) I have tried to make sense of this in my own little head and have made an attempt to look behind the scenes. I have come to realize that this could be an effort in striking back at Apple’s (anticipated) huge product release over the weekend – that being FinalCut Pro 5, Motion 2, SoundTrack Pro, DVD Studio Pro 4 and Shake 4; effectively stomping Adobe out of the picture in the professional studios. Ceding this title to Apple, they are now moving on to another market that has captured the Mac platform – web development. For the last 3-4 years, Macromedia has had a huge amount of revenue generated from the Mac platform, ranging from 34%-52%. Those are not bad numbers considering the Mac’s supposed market share of 3-4%.
OK, maybe they are not ceding the title yet.
I just learned that they have now licensed rotoscoping technologies from Curious Software. I guess they intend to use the licensed technology to strengthen their professional offerings in future Adobe software titles. With this, ummm… new found technology from Curious, they will have a powerful paint engine for moving images, a sophisticated roto-matte system and a range of features for wire and rig removal or content restoration.
So it seems they are just striking back at Apple.
Anyone remember when Adobe (reluctantly) moved their applications to OSX? Even though PhotoShop was/is their #1 flagship program and everyone was screaming for it, it was the LAST program to go OSX.
Why? Competition! There is none for PhotoShop! So Adobe put PhotoShop on the back burner while concentrating on their other products that had competition.
Competition is good!
ron g –
i agree. i too think adobe is making this purchase to position itself better in relation to apple. that makes sense because, if apple had bought macromedia instead, imagine their increased threat to adobe! apple and adobe used to be close partners but i don’t think that has been the case for awhile now. this will be interesteing. however, i think users will be the losers (again).
hey. one more thing. i updated to OS X 10.3.9 this morning and i haven’t had a single pop-under today anywhere on the ‘net. anybody else notice this too? could it be from 10.3.9?
“This is scary… Adobe is not as committed (other than Photoshop) to the Mac platform as Macromedia is. I was hoping that Apple would have acquired Macromedia eventually.”
You’re nuts. Macromedia has its own Windows-only products, and Dreamweaver was known to be slower on the Mac than on Windows. I heard such bad things about it I never upgraded. Macromedia isn’t any more Mac friendly than Adobe. Adobe, on the other hand, offers more Mac products than most companies and Apple likes to use Photoshop to show off Macs.
We’ll have to wait and see how this plays out. A couple of things to think about though:
1. There will certainly be a lot of scrutiny about the monopoly potential. The deal may well be blocked.
2. Adobe will not discontinue Mac versions if those products are making money.
3. If Adobe do discontinue Mac versions because they are not viable, Apple will take up the slack if there is a market.
4. The Mac market is expanding again. There will be less incentive to kill Mac versions when significant profits can be made.
Also consider this; Adobe didn’t just decide one day to stop supporting the Mac for the hell of it. Final Cut Pro was a better product and was winning in the video field. Adobe had no reason to provide a distant second product. So they went Windows only on that product because there weren’t any Windows alternatives.
On the topic at hand, I’m a big time Freehand user. I hate to see it go away. It’s so much easier for me after years of use. I love its multi-page and long document capabilities and text formatting. I hardly ever use Quark or anything else other than Photoshop anymore. I have some on screen color issues that aren’t in Illustrator, but the output is accurate.
Anybody thinks this is good news is very shortsighted.
This obvious monopoly gives the arrogant suits at Adobe more leverage. Remember Adobe’s open letter when they suggested their Macintosh users switch to Windows? They need to be knocked off their high horse and now there’s no one to do it!
As an educator who can get a Macromedia site licence for a reasonable price but get screwed by Adobe for their products this can only be bad news.
Our students love Macromedia Suite and it is the mainstay of our programme. Just hope that Adobe don’t wreck the whole thing
Well, I know this has been rehashed a bunch of times already, but I just wanted to point out my own thoughts on Freehand.
I spent nearly 10 years with each application. I worked at a company who used FH exclusively for 3 years. I did package design and can say, without any hesitation that FH was far more useful than Illustrator or Quark. Why? Well, primarily because FH has some excellent page-layout and typographic features in addition to its vector-based tool set. I don’t think Freehand was a better illustration tool, I mean look at the gradient mesh in Illustrator, but I do think that it excelled as a design tool, merging the layout and illustration features in a more or less well thoughtout workflow. I’ve noticed Freehand slip into disarray in recent years and that’s sad. I used to really love it.
For those of you who have beena round a while, you’ll remember that Freehand continues to be juggled around. Originally produced by Altsys, then sold to Aldus, then sold to Adobe, who sold it to Macromedia and now, who just bought it again. I’d hate to see it go for good. Perhaps it will be purchased by some small company who will revitalize it.
As for the other apps from Macromedia, I doubt any MM product which mirrors Adobe’s existing tools will survive the merger. This means Dreamweaver, Fireworks and Freehand will likely get the short end of the deal.
From a design and pre press perpective, Adobe have done a much better job at adapting to the OSX way of life.
Lets just hope Adobe and Apple continue to play nice in the future.
This merger was done because the product lines of both companies are very mature. How many new versions can they bring out of Photoshop or Flash or whatever? What can they add that makes the new version worth buying? Answer: They can´t. Everything in the current or last or previous version of Photoshop is all you need.
New versions of Photoshop, Flash, etc. will now come out every two-3 years, if that. (How long is it between Quark updates?)
To make up for this, the two companies combine, cut costs drastically and make up the profit in lower cost per unit sold. Or go with costly annual subscriptions…..that´s what a monopoly is good for….
Steve Jobs has just sent out the rush order: In 2-3 years, he wants an Apple-developed version of Photoshop, Flash, and Website making software.
Apple killed Adobe´s Premier for the mac. Can and will he do the same for the others?
Seashore.
And uh, what ever happened to PixelNhance?
Well I hope they rewrite Flash to make it a bit more intuitive.
Everyone keep what versions of software you have now, you may be using them for a while if this goes down. Let’s face it some of these applications can’t get much better. Apart from a few additional features how much better can they get. I could do my current job with Photoshop 4.
Flash has become such a bizaare concoction of coding, one needs a degree in it just to write something simple, let alone a more complicated project. It used to be Flash projects could be done by the graphic artist, now one needs to hire a graphic artist plus someone versed in the maze of Flash ActionScript.
Flash is a great program, but….
I see Adobe melding Acrobat pdf files and Flash together.
Photoshop, GoLive, Illustrator – great programs as they are, will I ever need to buy a new version?
In a sense, OS X came along too late. No one has got much choice now but to use the latest versions of everything. I agree that Freehand 5 was as good as it gets. Such a shame it’s gone forever.
BTW does anyone know if it’s possible to turn off anti aliasing if OS X FH? It seems a bit absurd to have to work with fuzzy lines in a line artwork application.
re. bamboozled and Pop-Unders – I updated to 10.3.9 and when visiting another Mac site (that shall remain nameless) got a pop-under – I don’t think this issue has been addressed yet … I hope Apple employees read this as I’m pissed off.
Who gets FrameMaker?