AfterDawn: Tech news

Adobe shares lift after Microsoft buyout reports

Written by James Delahunty (Google+) @ 07 Oct 2010 22:41 User comments (4)

Adobe shares lift after Microsoft buyout reports Adobe stock jumped on Thursday following reports in the media that Microsoft has identified it as an acquisition target. The New York Times reported that Microsoft chief executive Steve Ballmer met with Adobe CEO Shantanu Narayen in San Francisco recently to talk about Apple's dominance in smartphones.
According to the report, which cited employees and consultants familiar with the situation, the two discussed several options to deal with the situation, one of which would see Microsoft acquiring Adobe. Adobe stock rose 17 percent to a high of $30 before settling back to close up 11.5 percent at $28.69 on the Nasdaq.

A Microsoft acquisition of Adobe would cost $15 billion or more based on Adobe's current market value. It would provide Microsoft with control of Adobe's flash player, used all over the web for video and graphics. Wall Street analysts see it as a possible way for Microsoft to integrate graphics and video capabilities into software it develops for phones and tablet computers.

"It's certainly possible," said Morningstar analyst Toan Tran of a potential deal. "It may be a case of 'the enemy of my enemy is my friend' and both Microsoft and Adobe have a common enemy in Apple. The Flash platform in Microsoft's hands might be an interesting competitive weapon against Apple."

Microsoft already has its own Silverlight media platform, but it has failed to gain prominence in the market.

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4 user comments

17.10.2010 22:52

I would hate for this to happen, but I bet the next microsoft paint would be a great program!

27.10.2010 23:33

Because we need more cancer.

37.10.2010 23:46

I wouldn't let ballmer do it, everything he plans fails so far.

48.10.2010 0:24

James and I were discussing this earlier. A VERY conservative bet, based on Adobe's current $14 billion market cap, would be a $17-19 billion buyout.

They could then rehash Flash, hopefully make it better, and be better suited to face the giant that will be HTML5.

Having built-in Flash for their Windows 7 Phone devices may also help them compete against Apple/Google on that front.

Lots of speculation here, but a very expensive bet for Microsoft if it comes to fruition.

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