With the new Apple iPad receiving an iHype or iYawn from the tech and media communities, a former colleague and Applephile, Patrick Kearney, suggested that Apple was crazy not to just acquire Adobe and own/integrate Flash. I counterpointed via the socialnet, that Adobe would be more integral to Google’s apps and offer a serious checkmate on Steve Jobs’ ability to close out his Apple hardware and software ecosystem.
The Google Value in Owning Adobe:
- Keeps Google intrinsic to Apple, especially if Bing replaces Google Search across Safari, iPhone, iPad browsers and devices.
- Adobe owns Omniture, an online marketing, data mining and analytics company, which it picked up in September 2009. Like Google’s acquisition of Urchin which became an invite-only Google Analytics and is now free for anyone. Omniture could be the premium or pro solution for big brands that need the stepabove solution, and of course crave CRM. It’s more behavioral, offers paid SEO across all search platforms, so it fits accretively.
- Launch Google lite version of Photoshop and Dreamweaver (and…?) for its Google Apps. Many people are moving over to Gimp, an open source Photoshop design app, from outdated versions of Adobe’s Photoshop. This would democratize the products, while still offering premium versions that require a monthly subscription to remove the contextual ads and continue to innovate the product features for power-users before they go mainstream and free. Think of it as R&D for the premium, paying crowd who want the full version, and then as features become common, they go to the open, Google app public. This model of lite versus full versions is working well for the Apple Apps Store, and could move to an online subscription model to avoid distribution fulfillment and other retail packaging costs.
- Ownership of Flash enhances YouTube’s dominance in online video. Pretty clear, Google labs up Flash internally and figures out ways to make it pay out more for its slowly monetizing video flagship. YouTube’s choice advertisers get premium Flash benefits; innovations trickle down to other top UGC performers.
- Google Phones benefit from mobile improvements to Flash. The Android and Nexus One become more marketable, and Google licenses Flash to the Blackberries and other mobile players.
- And, of course, the obvious: every media-savvy site uses Flash and it rolls up 75% of online video, plus marketers like flashy display banners, so Google owns more of the food chain - from media co’s to video players to brands and their agencies looking to stand out in a very noisy internet environment.
Per Gordon Paddison, marketing consultant of Stradella Road on the iPad launch:
Flash appears to be MIA [on the iPad]. We didn’t get caught up in the Apple-Flash fracas when it was restricted to the iPhone/iPod Touch, since those small screens are ultimately meant for snacking on the web. But when Mr. Jobs calls the iPad “the best way to experience the web” and then shows a demo clearly lacking Flash support, it feels like we’ve dropped into some alternative universe. Whatever your feelings about Flash on the web, the reality of it is that millions of sites, and some 75% of online video, rely on it. No flash = no Disney, Hulu, Farmville, ESPN, etc. And, as our friend Ian Shafer points out, online ads are “almost 100% rendered in Adobe’s Flash.”
Now, Microsoft could come in and acquire Adobe too, which would be a typical MS blocking move, but Adobe’s product lines are less valuable as their packaged software would be bring down Redmond’s current revenues of Office products. So, wait and see, we like to prognosticate, so if this happens, we’ll channel our internal Nikki Finke “Tolja!”.
Some minor background for those not familiar with Adobe. Per Wikipedia:
Adobe Flash (formerly Macromedia Flash) is a multimedia platform originally acquired by Macromedia and currently developed and distributed by Adobe Systems. Since its introduction in 1996, Flash has become a popular method for adding animation and interactivity to web pages. Flash is commonly used to create animation, advertisements, and various web page Flash components, to integrate video into web pages, and more recently, to develop rich Internet applications.
Omniture’s Products, again via Wikipedia:
- SiteCatalyst, is Omniture’s flagship software as a service application that offers web analytics.
- Test&Target offers A/B and MVT (multi-variate testing) and is derived in part from Offermatica and Touch Clarity.
- Test&Target 1:1 is their main behavioral targeting solution getting down to the individual level of testing.
- Discover is their data mining offering.
- Insight is derived from their Visual Sciences acquisition in 2007.
- SearchCenter is their product to assist with Paid Search optimization in systems like Google’s Adwords, Yahoo! Search Marketing, and Microsoft Ad Center.
- Recommendations offers automated product and content recommendations
- SiteSearch is their on-demand Enterprise Search product.
- DataWarehouse is their data warehouse offering.
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Or as I was suggesting - Apple should buy Adobe, and el Jobso can simply fire whoever he’s been feuding with all this time over Flash and own the lion’s share of digital video and media creation market once and for all. The Adobe acquisition would also help fill that iBookstore with all their co-ventures in e-publishing, and really give Amazon a run.
Great analysis! I always wanted Google to acquire Omniture well before Adobe did as I have spent the last few years continuously running into the same scenario where clients would end up utilizing both Google Analytics and Site Catalyst as Google was the report that the masses knew and Omniture was the report professionals trusted. I’m a huge fan of Omniture, especially after having had to run in-house analytics way back when. No one who is not an Analytics company should be subjected to such hell! I used SiteCatalyst when it was Webside Story (and HitBox), Search Center when it was Atomz and the wealth of their CRM products over the years. Omniture did a fantastic job of rolling up the best of the best!
My concern with an acquisition on the basis of Flash is simply that Flash is likely a short-term conundrum. Flash maintains a dominant place in media consumption today no question, and my biggest turn off relating to the iPad was the lack of Flash, among a list of other things leaving me underwhelmed. However, HTML5 maintains the capabilities and open support to supplant that dominance in the short-term, especially if Apple and others continue to disregard Flash’s relevance. The good news is that the Android OS, Nokia and Windows Mobile will be supporting Flash 10.1 when it’s released in the next couple of months.
The greatest synergies I see in regard to such an acquisition would be in support of both Android, and more importantly ChromeOS. As you maintained, integrating and making available a light version of the Adobe Suite of tools for general release would be powerful. Take the ChromeOS and Google Docs and layer in the non-pro version of media tools and applications that Adobe could present and both Microsoft and Apple find themselves at an immediate disadvantage.
My biggest concern though stems specifically from the business integration of both companies. Google maintains a very broad and distributed model where Adobe, while certainly providing some technologies (Flash, Reader) on as broad and distributed a basis, tends to maintain a more focused and targeted business model. Additionally, it’s a cultural thing, Google maintains an almost whimsical reputation of throwing unpolished product out to the public and polish it with their participation, where Adobe tends to align more with the Apple modus operandi of a more stringent and polished product cycle.
Thanks for the read!