Microsoft may buy Adobe to counter Apple

 

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By Barry Collins

Posted on 8 Oct 2010 at 07:33

Microsoft is reportedly lining up a bid for Adobe in an attempt to counter Apple's success in the mobile market.

Microsoft CEO Steve Ballmer and Adobe boss Shantanu Narayen recently met in person to discuss ways of combatting Apple, according to a report in the New York Times. One of the topics under discussion was a potential takeover, according to the newspaper.

It may be a case of 'the enemy of my enemy is my friend' and both Microsoft and Adobe have a common enemy in Apple

Adobe's Flash technology has been publicly shunned by Apple, which refuses to let the software anywhere near its iPhone or iPad devices. That certainly hasn't harmed sales of the Apple devices, however, with strong iPhone and iPad revenue helping to elevate Apple above Microsoft as the world's most valuable tech firm.

Microsoft has its own Flash rival in Silverlight, but a potential takeover could see the software giant throw its weight behind Flash in an attempt to isolate Apple. Google's Android and other mobile OSes offer support for Flash.

Analysts believe a takeover is a distinct possibility. "It may be a case of 'the enemy of my enemy is my friend' and both Microsoft and Adobe have a common enemy in Apple," Morningstar analyst Toan Tran told Reuters. "The Flash platform in Microsoft's hands might be an interesting competitive weapon against Apple."

Adobe is currently worth around $15 billion, a figure that's well within the reach of Microsoft's budget. On a visit to London earlier this week, Steve Ballmer boasted that Microsoft would make a pre-tax profit of $26 billion this year.

Ballmer was last week criticised by his own board for his failings in the mobile market, resulting in the Microsoft CEO being awarded only half of his maximum bonus.

Microsoft has refused to comment on the takeover speculation, while an Adobe spokesperson told the New York Times that "Adobe and Microsoft share millions of customers around the world and the CEOs of the two companies do meet from time to time. However, we do not publicly comment on the timing or topics of their private meetings.”