Will Microsoft Acquire Adobe to Compete Against Apple ?

Added by Gary Dunn on October 9, 2010

Share value of Adobe Systems Inc. saw a huge increase prompted by a report by The New York Times that Microsoft Corp. might consider acquiring Adobe to compete with the mobile phone domination by Apple Inc.

The Adobe stocks on Nasdaq registered an increase as high as 17 percent to $30 and closed at $28.69. There was an increase of 0.4 percent of Microsoft’s share value as well.

Reportedly, Steve Ballmer, the CEO of Microsoft met with Shantanu Narayen, the CEO of Adobe to discuss measures to compete with Apple’s competitive edge in the mobile phone market, including acquisition of Adobe by Microsoft.

According to analysts at Wall Street, such an acquisition can provide Microsoft with a platform to integrate video and graphics features into software for mobile phones.

Adobe’s Flash platform might also provide Microsoft with a competitive edge against Apple.

Steve Jobs, the CEO of Apple, had discouraged people from using Adobe’s Flash for developing applications for its iPad and iPhone. According to Reuters, Toan Tran, an analyst at Morningstar is quoted as “It may be a case of ‘the enemy of my enemy is my friend’” as both Adobe and Microsoft have Apple to compete against.

Such an acquisition deal could well be over $15 billion depending on Adobe’s value in the market. This could be a major move for Microsoft as it plans to launch a new mobile software and targets to compete against the iPad with new tablet computers based on Windows platform very soon.