“This is a game changer for Adobe and its customers,” said Shantanu Narayen, chief executive of Adobe, in a statement. “We will enable advertisers, media companies and e-tailers to realize the full value of their digital assets.” Saying so he announced that Adobe will buy out web analytics firm Omniture for what a lot of analysts feel a high $1.8 billion.
The release which went out on Omniture’s site said, The combination of the two companies will increase the value Adobe delivers to customers. For designers, developers and online marketers, an integrated workflow — with optimization capabilities embedded in the creation tools — will streamline the creation and delivery of relevant content and applications. This optimization will enable advertisers, advertising agencies, publishers and e-tailers to achieve greater ROI from their digital media investments and improve their end users’ experiences.
The idea is clear for Adobe, it wants to get into digital advertising, which at a point is a natural extension to its existing suite of products. Omniture is one of the bigger players in the traffic analytics market which is headed perhaps by Google Analytics. In fact it counts amongst its clientele names such as eBay, AOL, Wal-Mart, Gannett, Microsoft, Neiman Marcus, Oracle, Sony and HP and has nearly 5000 customers. Adobe however might be looking at taking this product to its existing customer base and make them take analytics services.
Source: Venture Beat
The key point of this move is that both Adobe and Omniture aren’t at their revenue peaks, Adobe has been losing a bit of ground over the years with its suite. Omniture on the other hand has to contend with a top class and free product in Google Analytics and has not been gaining active market share to command a premium over its share price at least. As Andy Beal questions, Did Adobe just bring on another struggling service which could be in decline (because of the evil Google empire)?
From a different stand point it seems a perfect match. Adobe’s creative solutions for better UI can actually add pertinent value to a lot of Omniture data that perhaps very few can match. Omniture on the other hand will come as a built in solution perhaps for a lot of development tools that Adobe provides. Om Malik shed more light on this aspect, ‘Media companies want to understand which rich video content is performing the best, for example, while advertisers and ad agencies that use Flash to produce online ads want to know the click-through rate of those ads in real time.‘
Source: Download Squad|
And not to forget Adobe provides some of the best digital develpment tools and has a valuable publisher base, which can do with better traffic measurement and analysis and produce even better solutions.
The deal itself is for $1.8 billion in cash, or $21.50 per share which is a 45% permium over the highest share price in the last 30 days of trading for Omniture.
