DealZone

A deal in need of a touch-up?

September 16, 2009

Adobe Systems, the maker of Photoshop and Acrobat, hopes its $1.8 billion purchase of fast-growing business software maker Omniture will turn around its declining sales.

Adobe reported lower quarterly sales and profit after unveiling the deal. A snazzy new acquisition is a welcome distraction.

The purchase will give Adobe a new stream of revenue to offset a decline in customer upgrades of older versions of its programs. Omniture charges customers fees based on monthly web site traffic, so it is less sensitive to economic swings than Adobe. “There is no way Adobe can grow organically. This is a smart move,” said Global Equities Research analyst Trip Chowdhry.

But not everyone is convinced. Larry Dignan at ZDNet said he slept on it and, at 4:52 this morning, said in his Between the Lines column that he couldn’t see the logic. He quoted a couple of negative analyst notes.

“Adobe’s Omniture purchase isn’t a slam dunk. The burden of proof regarding synergy, product roadmaps and (CEO Shantanu) Narayen’s vision where analytics meets content creation rests with Adobe,” he wrote.

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/