How ... interesting.
Combining two of the largest makers of software for creating and delivering digital content, Adobe Systems Inc. said Monday it will acquire Macromedia Inc. in an all-stock transaction valued at approximately $3.4 billion.
Shares of Macromedia, known for its Dreamweaver Web-design program and Flash, which animates and adds interactivity to Web pages, rose more than 8 percent in early trading, while Adobe shares sank 11 percent. Both companies said the long-rumored acquisition was not to consolidate and cut costs but to help Adobe expand into new markets, particularly in the area of providing content to mobile phones and other handheld devices. [...] There is some product overlap, including Adobe Illustrator and Macromedia Freehand in graphics design, Adobe GoLive and Dreamweaver for Web page creation, and Photoshop and Macromedia Fireworks for working with photos and other graphics...
I wonder what this means for products where they do overlap. It's undeniable, for example, that many improvements in GoLive were largely driven by the need to compete against Dreamweaver, the market leader in web page creation software. It's hard to see how Photoshop and Fireworks have had much to do with each other, though; aside from probably convincing Adobe to directly support PNG in Photoshop, the two software programs don't see to address each other much, and in general seem to have very different user bases. Photoshop is a high end program, and Fireworks is a medium to low end program. Likewise, people seem to use Freehand and Illustrator for different things. That said, for people who need to do a lot of both general and specific web graphics work, it's not all that unusual to find that someone has both Photoshop and Fireworks, or Freehand and Illustrator. (It is, however, a rare person who has both GoLive and Dreamweaver.)
The question is, will Adobe feel the need to keep improving the programs now that they own both of the leading programs in those categories? Is it more likely that they'll consolidate feature sets a version or two down the line and then stop selling the less lucrative program?
There's an odd wave of consolidation going on in the software industry these days. Symantec bought competitor Veritas (backup and security); Oracle, in a long, drawn-out public fight, bought out PeopleSoft; Corel, makers of WordPerfect, bought out Jasc Software, likely in an attempt to reinvigorate CorelDraw with Jasc's PaintShop Pro featureset, or else possibly as a straight-up replacement. Most of these consolidations are recent enough that they haven't yet had any effect on the products offered by the merged companies.
Posted by iain at April 18, 2005 11:14 AM
