Newsletter Issue #567: Microsoft/Adobe? Spare Me
October 11th, 2010At one time it was fair to say that Adobe and Microsoft were enemies, rivals in some product categories, such as Web apps. So we had Adobe Flash competing against Microsoft Silverlight, and may the worst product please disappear.
At one time, in fact, Microsoft tried to develop a suite of graphics apps to compete with Adobe’s Illustrator and Photoshop. But that was just another Microsoft initiative that failed.
But why would Adobe and Microsoft suddenly consider a corporate marriage?
The answer is, of course, Apple. Adobe is chafing over the inability to run Flash on the iOS, and they no doubt feel intimidated by Apple’s competing software, primarily Final Cut Pro and Aperture. Indeed, Final Cut Pro, whose creator was once lead developer of Adobe Premiere, has become a mainstay in the movie industry. In turn, Premiere exited the Mac platform, and only returned recently.
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There you go, Gene, being sensible again! But corporate America is not always sensible. History shows a number of times when two floundering companies have seen a merger as a solution to their problems (think K-Mart and Sears). The theory seems to be that if you lash two sinking ships together the whole thing will stay afloat, a theory I doubt the US Navy accepts. Of course what would be created would be a corporate monstrosity: MS is already too big and too complex for anybody, let alone Balmer, to manage. Even without Adobe MS has already attracted its share of attention by regulatory authorities who think it’s a monopoly, and no doubt a merger would land it back in the courtrooms. But, especially because of the track records of these two companies, just because a merger would be dumb doesn’t necessarily mean it ain’t gonna happen. Now, a more interesting possibility might be an Apple takeover of Adobe. Given Apple’s 50 b. cash reserves, if they wanted to do that they could swallow up Adobe and then be looking around for lunch. Want to mull the possible consequences of that? (Sooner or later Apple is going to have to start doing something with that huge cash reserve, if only paying out dividends on APPL, or the stockholders will be coming after management with pitchforks and torches)