Macromedia and Adobe Planning to Tie the Knot - The New Deal
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This new deal, which the board of directors from both companies has approved, will be for $3.4 billion. Adobe will be paying almost three years worth of their current revenue for Macromedia and expects that it will take roughly a year to start seeing profits from the acquisition. Adobe is definitely the bigger company, with 4,000 employees and $1.67 billion annual revenue compared to Macromedia’s 1,450 employees and $422 million in revenue. There are still several months before they become one while a few more things need doing: some closing deals will be finalized, regulators need to approve the transaction, and the stock holders have to approve of it. Once it’s finished, Macromedia stockholders can expect each of their current shares to become 0.69 shares of Adobe. This was based on the companies’ closing prices on April 15. Macromedia’s stocks will account for roughly 18 percent of Adobe when this has all finished.
Though the companies have not released any information on product plans, alterations or discontinuations, the official statement linked from both corporate websites states: “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.” Everyone has been left to speculate exactly what this will mean to them.
For the most part, internet onlookers seemed surprised and horrified, posting forecasts of doom and premature epitaphs for all of Macromedia’s products. While a bit too quick to condemn Adobe, their concern is legitimate. In combining the functionality of Adobe’s portable document files (PDFs) and Flash, there is a lot that could go wrong. The problem is that these appear to be programs with very different purposes and users. PDFs attract the attention of people trying to document, collaborate, and replicate brochures or other print electronically. Flash is targeted for animation, interactivity and web use. So what exactly is complementary? It’s hard to tell exactly how the two will be interwoven, but a new “PDFlash” could bring the potential for interactivity and animation of Flash into PDFs. Perhaps it will open more potential to PDF collaboration or give those flat, boring text files some more glamour. What PDF technology can offer Flash animators is a little less clear.
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