Adobe to Acquire Omniture
Combined Company Will Deliver Comprehensive Solutions for Creation, Delivery and Optimization of Content and Applications — Adobe Systems Incorporated (Nasdaq:ADBE) and Omniture, Inc. (Nasdaq:OMTR) today announced the two companies have entered …
Context & Ripple Effects
Adobe enters this deal after a year spent defending and extending Flash: it released its rich internet application platform under an open-source license in January 2009, pushed new distribution channels and developer revenue models for mobile Flash ahead of Mobile World Congress in February, and its CFO Mark Garrett publicly declared Microsoft's competing Silverlight runtime 'has really fizzled' the same month.
The middle of 2009 was rougher — Adobe confirmed a critical Flash zero-day vulnerability in July, and analysts flagged Adobe software in August as a prime criminal attack target because it is widely installed and not automatically updated. Buying Omniture, reported by CNET at $1.8 billion, moves Adobe beyond creating and delivering content into measuring how that content performs — an expansion made by acquisition rather than internal build, at the exact moment its core runtime is under security and competitive pressure.
First-order effects
- Omniture shareholders exchange a Nasdaq-listed standalone analytics business for a reported $1.8 billion in the combined company, while Adobe gains web measurement and optimization capabilities it did not have to build internally.
- Adobe's creative and delivery customers can now buy authoring, delivery, and performance measurement from a single vendor, tightening the bundle around Flash-delivered sites and applications.
Second-order effects
- Microsoft's Silverlight challenge — which Garrett dismissed as fizzled back in February 2009 — now faces a rival stack that pairs the content platform with the analytics layer, raising the bar for any competing runtime to prove comparable value to marketers.
- Independent web-analytics vendors must respond to the largest content-tools vendor owning a measurement platform: sell, partner, or differentiate against a competitor whose tools sit next to the content being measured, with pricing pressure likely in both the creation and optimization markets.
Third-order effects
- If the pattern holds, creative-software companies consolidate into integrated marketing-platform sellers where analytics on content performance becomes a native feature of the authoring product — a structural bet that whoever owns the content pipeline can also own its measurement.
- The security overhang compounds structurally: with Flash identified as a top criminal target and lacking automatic updates, each acquired layer attached to that installed base widens the attack surface Adobe must defend and harden.
The trend: Creative-software vendors are absorbing measurement and optimization businesses, folding analytics into the content pipelines they already control.