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Adobe spends $1.8bn on Omniture web brains

Out consult Microsoft's Silverlight

Bridging the IT gap between rising business demands and ageing tools

Adobe Systems is snapping up the self-described "web analytics and online business optimization software and services" company Omniture for $1.8bn.

Considering that Omniture's market capitalization as of last Friday was $1.29bn, there may dancing in the streets this evening in Orem, Utah, home of Omniture's corporate headquarters, as the stock leaped more than 25 per cent in after-hours trading.

The acquisition is aimed at enhancing Adobe's efforts to further cement the company's Flash Platform as the go-to online media and advertising tool by allowing the embedding of Omniture's analytical and optimization tools into Adobe's content-creation software.

And, of course, to blunt any moves Microsoft might make to advance the fortunes and future of their rich-media platform, Silverlight.

Microsoft is pushing Silverlight as a platform for advertisers, media companies, and software partners through support for search-engine optimization, the ability to run out of the browser, and Windows Presentation Foundation (WPF). Microsoft’s goal is for companies to build content for businesses and consumers using Silverlight rather than Flash.

By adding Omniture smarts to the market-leading Flash Platform, Adobe hopes to keep its predominant position of being the player of choice on what it claims are 98 per cent of Internet-enabled desktops.

Adobe's graphic explanation of the Omniture acquisition

Adobe's vision of its Omniture-enabled future (source: Adobe)

In a statement (PDF) announcing the acquisition, Adobe chief executive Shantanu Narayen said: "This is a game changer for both Adobe and our customers. We will enable advertisers, media companies and e-tailers to realize the full value of their digital assets."

Omniture CEO Josh James was more direct. "By joining forces with Adobe," he said, "we will accelerate our ability to... bring new innovation to the market that improves content engagement, advertising effectiveness and the overall user experience, which will drive more advertising dollars online.”

Adobe has long been enamored of expansion through acquisition. In the early and mid-1990s it acquired OCR Systems, which paved the way for the development of Adobe PDF, Aldus, which brought with it PageMaker (since left in the dust by Adobe InDesign), and Frame Technology, creator of FrameMaker technical-publishing software.

The company's acquisitions have continued apace since then, culminating with such buys as competitor Macromedia in 2005, video-software publisher Serious Magic in 2006, and cross-media platform service provider Scene7 in 2007.

When the acquisition closes later this year, Omniture will join that group.

Omniture claims more than 5,000 customers, including eBay, AOL, Wal-Mart, Gannett, Microsoft, Neiman Marcus, Oracle, Sony, and Hewlett-Packard. Today the company has around 1,200 employees in 20-plus countries worldwide, and revenues $295.6m.

Those employees - those that survive the acquisition, at least - will join a company that has around 7,500 employees in 40 countries, and 2008 revenues of $3.58bn.

More information in an Adobe FAQ (PDF). ®

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