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Commentary: Macromedia Acquisition Solidifies Adobe’s Position

When Adobe announced its plans to acquire Macromedia prior to NAB, many attendees expected at least a significant announcement of collaboration would be made during the show’s run. Instead, each booth, separated by almost a quarter mile, was abuzz with new technologies that advanced each company’s value for its customers.

Much has been written about the impending acquisition, and conversations with show attendees tended to veer toward the "Adobe-Macromedia scorecard." The general consensus was that Dreamweaver would outlive GoLive, Illustrator would trump Freehand, Fireworks would fizzle in the face of the industry-dominant Photoshop, and Flash would merge into Acrobat (or vice-versa, depending on which product a particular show attendee liked more).

Little was said, though, about the acquisition’s potential regulatory hurdles, the inevitable cultural clashes, and whether this acquisition is a pre-emptive move to consolidate a bullet-proof, Windows-based suite of creative tools that will compete with Apple’s digital hub strategy and increasingly unified digital media workflow.

Adobe faces potential regulatory hurdles in three areas—Web development, illustration, and photo manipulation tools. In the latter two categories, a combined Adobe-Macromedia effectively eliminate all competition, since no other market competitor comes close to the combined market share of Illustrator/Freehand or Photoshop/Fireworks. In the Web development category, while Adobe might argue that it must acquire a robust Web development tool to round out its Creative Suite, the Macromedia acquisition will mean that Adobe has acquired two of the three dominant Web development tools in the last six years (it acquired GoLive, then called GoLive CyberStudio, in 1999). Even with GoLive’s lackluster competitiveness against Dreamweaver, it will be difficult for Adobe to argue that Microsoft’s FrontPage acts as enough of a dominant competitor in the professional Web development space to ward off regulatory inquiries into the web development software landscape.

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