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Microsoft: Ballmer discussed Adobe buyout bid, Apple iPhone

o Nick Spence
08.10.2010 kl 14:34 | Macworld U.K.

Shares in Adobe Systems have soared following reports computer giant Microsoft has been in talks to buy the creative software specialists, and discuss ways to combat the success of Apple's iPhone.


Shares in Adobe Systems have soared following reports computer giant Microsoft has been in talks to buy the creative software specialists.

According to The New York Times, Microsoft CEO Steve Ballmer recently met with his counterpart, Adobe CEO Shantanu Narayen to talk about how the pair could work together to combat Apple.

Apple's control of the mobile phone market, and runaway success of the iPhone, apparently proved hot topics, during a meeting that lasted more than an hour at Adobe's offices. While Microsoft has plans for a range of Apple iPad like tablets for release before Christmas, Adobe has been in a long-standing feud with Apple over the use of Flash, which Apple claims is buggy, liable to crash, open to abuse and a drain on iPhone, iPod and iPad batteries.

The pair also discussed a possible acquisition of Adobe by Microsoft, according to employees and consultants to the companies who were involved in the discussion, who spoke with the newspaper off-the-record.

Those insiders added, Microsoft had courted Adobe several years ago but feared US antitrust rules would prevent a take over or merger. That view may have changed, with the rise of both Apple and Google as leading industry players.

"There's not a question that the atmospherics of Microsoft are much more different that they were a decade ago," Randal C. Picker, a professor of law of the University of Chicago told The New York Times. "I think you could imagine Microsoft being a more aggressive purchaser in a world where they are no longer an 800-pound gorilla."

Adobe noted the meeting had taken place. "Adobe and Microsoft share millions of customers around the world and the C.E.O.'s of the two companies do meet from time to time," Holly Campbell, senior director of Adobe's corporate communications told The New York Times.

"However, we do not publicly comment on the timing or topics of their private meetings." Microsoft meanwhile, added it did not "comment on rumours/speculation."

Leading market analyst Yun Kim claimed a potential buyer for Adobe would be "great" for the software company, which is looking to grow its annual revenue to $5 billion/£3.16 billion in the next two years.

Last month, Adobe reported strong financial results for its third quarter fiscal year 2010 ended 3 September 2010.

Adobe achieved record revenue of $990.3 million/£625.47 million, compared to $697.5 million/ £440.54 million reported for the third quarter of fiscal 2009 and $943.0 million/£595.59 million reported in the second quarter of fiscal 2010, representing a 42 per cent year-over-year revenue growth.

Adobe's third quarter revenue target range was $950 million/£600.01 million to $1 billion/£0.63 billion.

Adobe manufacturers a range of industry leading software including Photoshop, Illustrator, Dreamweaver, InDesign, After Effects and Acrobat.

Keywords: Consumer Electronics  Business Issues  
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