Is Microsoft Circling Adobe?

The New York Times reports that Microsoft CEO Steve Ballmer and Adobe (NSDQ: ADBE) CEO Shantanu Narayen held a secret meeting recently. On the table, according to unidentified sources: A purchase of Adobe by Microsoft (NSDQ: MSFT). A deal would combine two legacy software businesses (Photoshop, Dreamweaver; Office, Windows) and — the companies hope — possibly provide a buffer to Apple’s rise (Microsoft would control Flash and Adobe Reader). It would also give Microsoft a big and much-needed online analytics business in Omniture (NSDQ: OMTR).

It also raises lots of questions. To start: Does Microsoft really want to double-down on the desktop software business? Is this really the best way for the company to counter Apple (NSDQ: AAPL) (wouldn’t the long-rumored purchase of RIM (NSDQ: RIMM) make more sense)? And, why, if they wanted to keep it “secret” did Ballmer bring an entourage to meet at Adobe headquarters, as the NYT says he did?

The report sent Adobe’s stock soaring by as much as 17 percent to $30, according to Reuters (NYSE: TRI). It closed at $28.69, up 11.5 percent, for a market cap of about $14.9 billion. Microsoft barely budged.

More to come.