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Summary:

Two companies who have not kept up with times – Adobe Systems and Macromedia – are hooking up. Adobe is buying Macromedia for $3.4 billion in stock. The deal is proof that there is little or not growth organic growth left in the old Silicon Valley. […]

Two companies who have not kept up with times – Adobe Systems and Macromedia – are hooking up. Adobe is buying Macromedia for $3.4 billion in stock. The deal is proof that there is little or not growth organic growth left in the old Silicon Valley. Desktop publishing, and subsequently Web 1.0 publishing are passe. These two companies have not developed killer apps for either broadband or wireless enabled comm-puting. They missed the whole blogging thing, and have not produced a must have killer app in recent times. They are becoming increasingly irrelevant in digital worlds where free programs like iPhoto and Picasa are setting the tone on the desktop. Don’t expect innovation as a result of this deal – this is a deal to boost the revenues and maybe profits.

By Om Malik

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  4. Not kept up with the times? Picks and shovels man, picks and shovels. Both companies have been incredibly profitable over the last decade and continue to do so. I see this deal as a huge win for two companies whose products are so good that they’ve never had to give them away in order to get people to use them. While it may be true that Adobe hasn’t built themselves into a strength on the web as they have in the print world, that’s what the buy is for… Macromedia has.

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  5. mike i have a different feeling about this. i am not sure that 2+2=22 here. I think these are sign of the times and most companies from the old desktop/clientserver era are struggling. i think this web thing is a lot more complicated than people realize from a business perspective. more later

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  9. Om, Macromedia’s Flash franchise will be the platform of choice for Mobile gaming and advertising. Check out their deals with the major handset vendors like Samsung. Adobe is the one that was behind, and needed this acquisition to redress. The long-term money will be in rich-media, not text apps, and blogging falls in the text app category. Sramana

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  10. Om – I have to disagree with you here. It’s all about mobile, and right now Flash is the new game in the land of mobile. Samsung, Nokia are signed up and you know the folks in Schaumburg are going to be signing up too very soon for mobile Flash. Let’s face it, this is a stroke of genius on the part of the Adobe folks who clearly don’t want to be only relevant on the desktop like the 800 lb. gorilla Mister Softee.

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