Antoine's Blog

Adobe acquires Macromedia for $3.4 billion

Blog Author — Mon, 18 Apr 2005 16:28:00 GMT

The market is going wild ! Adobe, the leading software firm in creation tools has just announced its acquisition of challenger Macromedia. Adobe is now the unique provider of graphical softwares for the designer and interactive content creator communities. It shouldn't be a good news for content creators neither for shareholders. As a matter of fact, the new Adobe / Macromedia business will not have such a big space for growth...

If both Macromedia and Adobe are off, here is the Macromedia announcement for this news :

ADOBE TO ACQUIRE MACROMEDIA

Combined Company to Deliver Industry-Defining Technology Platform for Rich, Interactive Content

SAN JOSE, Calif. - April 18, 2005 - Adobe Systems Incorporated (Nasdaq: ADBE) today announced a definitive agreement to acquire Macromedia (Nasdaq: MACR) in an all-stock transaction valued at approximately $3.4 billion.

The combination of Adobe and Macromedia will provide customers a more powerful set of solutions for creating, managing and delivering compelling content and experiences across multiple operating systems, devices and media. Together, the two companies will meet a wider set of customer needs and have a significantly greater opportunity to grow into new markets, particularly in the mobile and enterprise segments.

"Customers are calling for integrated software solutions that enable them to create, manage and deliver a wide range of compelling content and applications - from documents and images to audio and video," said Bruce Chizen, chief executive officer of Adobe. "By combining our powerful development, authoring and collaboration software - along with the complementary functionality of PDF and Flash - Adobe has the opportunity to bring this vision to life with an industry-defining technology platform."

Under the terms of the agreement, which has been approved by both boards of directors, Macromedia stockholders will receive, at a fixed exchange ratio, 0.69 shares of Adobe common stock for every share of Macromedia common stock in a tax-free exchange. Based on Adobe’s and Macromedia’s closing prices on Friday, April 15, 2005, this represents a price of $41.86 per share of Macromedia common stock. Upon the close of the transaction, Macromedia stockholders will own approximately 18 percent of the combined company on a pro forma basis.

In the combined company, Chizen will continue as chief executive officer and Shantanu Narayen will remain president and chief operating officer. Stephen Elop, president and chief executive officer of Macromedia, will join Adobe as president of worldwide field operations. Murray Demo will remain executive vice president and chief financial officer. Dr. John Warnock and Dr. Charles Geschke will remain as co-chairmen of the Board of Directors of the combined company and Rob Burgess, chairman of the Macromedia Board of Directors, will join the Adobe Board.

"Both Macromedia and Adobe are passionate about creating and enabling great experiences across a wide range of devices and operating systems," said Stephen Elop, president and chief executive officer of Macromedia. "Our combined teams will be a powerful force for innovation around cutting-edge platforms for delivering content and applications."

Integration

The two companies are developing integration plans that build on the cultural similarities and the best business and product development practices from each company. The companies will make additional details and information about the acquisition available at .

"While we anticipate the integration team will identify opportunities for cost savings by the time the acquisition closes, the primary motivation for the two companies’ joining is to continue to expand and grow our business into new markets," said Chizen.

The acquisition, which is expected to close in Fall 2005, is subject to customary closing conditions, including approval by the stockholders of both companies and regulatory approvals. The transaction will be accounted for under purchase accounting rules.

Due to the absence at this time of estimates of the acquisition-related restructuring costs and the allocation of the purchase price between goodwill, in-process R&D, other intangibles and equity-based compensation expenses related to SFAS 123R, Adobe is currently unable to provide GAAP estimates on future earnings.

The transaction is currently expected to be break-even to slightly accretive to earnings in the first twelve months after closing on a non-GAAP basis. The company’s target of break even-to-slightly accretive to earnings on a non-GAAP basis assumes no adverse impact from the loss of deferred revenue in the first twelve months following the close due to purchase accounting.

Stock Repurchase Program

Adobe also announced its Board of Directors has approved a post-acquisition stock repurchase program of $1 billion. "After a review of the combined companies' financial position, our Board concluded that the repurchase program is consistent with our overall commitment to deliver value to our stockholders," Chizen added.

The repurchase program is in addition to the Adobe’s existing stock repurchase programs and is expected to commence following the completion of the acquisition. The repurchases will be funded from available working capital.

Conference Call

The management teams of both companies will host a financial analyst and investor conference call today at 8:00 a.m. ET (5:00 a.m. PT). The call can be accessed at 888-278-5324 (U.S.) or 706-643-3100 (outside U.S.) with conference call ID #5643249. A live Webcast of the call will also be provided at and . For those unable to listen to the live conference call, a telephone replay will be available at 800-642-1687 (U.S.) or 706-645-9291 (outside U.S.) with conference call ID #5643249. The telephone replay will be available beginning April 18, 2005 at 9:00 a.m. ET through April 20, 2005 at 12:59 p.m. ET. A Webcast archive will also be available on each company’s investor relations Web site.

Why photo sharing is not the next dot com bubble thing

Blog Author — Sat, 16 Apr 2005 11:02:00 GMT

Some people are wondering if recent photo sharing companies acquisition (Flickr, Snapfish, Photosite, Heypix!) are due to the "2000 internet bubble revival" or if this photo sharing application could lead to a real business model. I think photo sharing gets a true business model. Let me show you why.

First, digital photo camera sales have strongly increased this last 3 years, which means many people have just started with digital photo. This trend is still going up (think about camera phones as well).

Second, since the blogging community has emerged, people have discovered photoblogs, which is the first photo sharing step. It is really easy to share digital photos on your blogs (I recommend you to have a look at the Typepad blogging solution if you don't get your blog yet). Camera phone users are even sending their digital photos to their moblogs in real time, just to offer their readers real time photo sharing.

Is online photo sharing such a hit for the moment ? well, I can't say photo sharing is as popular as the messenger application is. But it will be, for sure. Since the creation of photography, people have always show their photos to their friends, family, colleagues, etc. How many times did you go at a family dinner where your mother ask you to see your last holiday trip photographies ?

Now photography is digital, and you will probably get your mother happy if you can show her your digital photos. But you will need online photo sharing for that.

So photo sharing should be the next killer application. The photo sharing business model has not been proved yet, it is true. But it will. No matter how because a killer application is always profitable. As a crashy entrepreneur told me one day : "get customers first, then think how to make them profitable..."

Flickr is not the last internet bubble company, but the first real photo sharing success in the US...and PixVillage could be the next one :-)

Europe still makes entrepreneurs !

Blog Author — Wed, 13 Apr 2005 08:18:00 GMT

Answering Loic Lemeur's post about the Yahoo acquisition of Flickr (this social network / web-based online photo sharing), I strongly recommend you to have a look at PixVillage, our software application dedicated to online photo sharing. Be sure we will do our best to succeed in this fast growing/competitve business :)

Social networking, just a buzz-word ?

Blog Author — Tue, 12 Apr 2005 23:47:00 GMT

Today, at Capital IT (see my previous post), Marc Simoncini from Meetic has pointed out that social networks were expensive (and long) to build while their business model (advertising and/or subscription) was unclear. Marc was talking about Friendster, Friendset, Orkut, etc. I think Marc is right. I have never understood how VCs could input so much money for these new "communities" concept (remember French Multimania?).

Let's think about it : you usually build a "social network" around common interests (say landscape photography) or for a dedicated goal with people you know (say your birthday party photo sharing). Would I have any interest to build a community with friends I already know. The answer is yes if I consider a particular topic as the core of our social ties (say tennis). Otherwise, I am afraid not.

Nevertheless, social networks with professional objectives (see LinkedIn) could be more valuable because I clearly see the added value for the end-user : sales, partnership, job search, etc.

I will follow carrefully what's going on social networks and business networks.

Building a valuable market position in Europe

Blog Author — Tue, 12 Apr 2005 21:12:00 GMT

I have been at Capital IT (Paris, France) this afternoon which is a 2 days meeting between high tech entrepreneurs and VCs. I have heard Denis Payre keynote (ex Business Object's founder and actual head of Kiala) talking about the long tail in european e-commerce industry (see also the Wired article about it). I am happy to see that european e-tailers have faced the US "very challenging" competition.

Then Yahoo Europe General Manager (Dominique Vidal) talked about Yahoo's acquisition of Kelkoo. He said one of the reason Yahoo bought european Kelkoo is its global presence in Europe and not the technology (shopbot). Obviously, the european market is more complex than the US one, especially for US companies with pan-european expansion plans.

Online photo sharing, the next killer application ?

Blog Author — Mon, 11 Apr 2005 18:58:00 GMT

Following the Yahoo acquisition of Flickr photo sharing service, the HP - Snapfish deal and the Heypix! - Cnet deal, it seems that web portals and digital camera manufacturers consider photo sharing as a killer application.

Digital photos amateurs have started with online photo sharing few yeas ago. Now millions of photos are publicly or privately displayed over the worldwide web while digital cameras sales have soared during this period. It is obvious that photo sharing is a way to recruit end users and even "networks of end-users". Once you grab a social hub, you will get his friends, family, etc.

At the beginning, Ofoto and Webshots were "traditional" web based services. Then Flickr has mixed social networking recruitment capabilities with photo sharing features, still as a web based service. Last (but not least) PixVillage brings kind of social networking (end users build their private networks the same way MSN Messenger do it) with P2P technology, which means digital photos are stored on the end-user PC and uploaded directly on their authorized contacts PC hard drive.

What will be photo sharing in the coming months ? hard to say, but one sure thing is that web based services will face storage and bandwith issues while their network is growing. Not P2P decentralized networks such as PixVillage. Online photo sharing could stay a free offer thanks to Pixvillage for end-users only benefit...

Photo sharing software list

Blog Author — Mon, 11 Apr 2005 18:07:00 GMT

PixVillage Software
Company	Business Model	Technology	Positionning
PixVillage	Free and Unlimited Storage	Peer-to-Peer (P2P)	Online Photo Sharing

Other Softwares
Company	Business Model	Technology	Positionning
Allpeers	Free (no information about storage)	Peer-to-Peer (P2P)	Online Photo Sharing
CircleXchange	Free basic version (limited storage), then subscription	Peer-to-Peer (P2P)	Online Photo Sharing
Hello (Google)	Free (no information about storage)	Peer-to-Peer (P2P)	Online Photo Sharing
Electric Shoebox	Free basic version (limited storage), then subscription	Peer-to-Peer (P2P)	Online Photo Sharing
OurPictures	Free basic version (limited storage), then subscription	Peer-to-Peer (P2P)	Online Photo Sharing
Photoleap	Free basic version (limited storage), then subscription	Peer-to-Peer (P2P)	Online Photo Sharing
Pixpo	Free basic version (limited storage), then subscription	Peer-to-Peer (P2P)	Online Photo Sharing
Sharealot	Free (no information about storage)	Peer-to-Peer (P2P)	Online Photo Sharing