“Now, we’re not ones to go ’round spreadin’ rumors…” That was the first line of a song from a comedy sketch on the old TV show “Hee Haw” and it just popped into my head. (watch it here). Rumors (or rumours, depending on your nationality) abound in the tech industry and are one of the reasons Wall Street can be a real rollercoaster track when it comes to tech stock, or any stock for that matter. This was especially true Thursday when Microsoft CEO Steve Ballmer met with Adobe CEO Shantanu Narayen in a secret meeting that afternoon. As soon as it started, the rumors began to fly.
It’s no secret Microsoft wants to compete in the mobile arena. So, naturally, the rumor that spread most rapidly across the net was the possibility Microsoft would “buy out” Adobe, presumably to position itself to more effectively compete in the mobile market against Apple.
Of course, both companies were mum about what was actually discussed during the meeting. But that did not stop speculation by both Wall Street and the media as to what it all meant. Some industry analysts seem to think the rumor, if true, would be a good thing for Microsoft, Adobe and their shareholders. Others are not so sure. However, it does leave some scratching their heads and thinking that such a buy out doesn’t seem make any sense at all. I can certainly understand why, because from some perspectives, it doesn’t.
On one hand, Microsoft is known for its operating systems, business software, games and other applications designed primarily for the desktop. It is what their licensing model is based on as well. That is how they built their empire; that is their domain. Sure, they had search and web-based platforms and services but it wasn’t their priority or expertise – and it showed. The desktop is what they do and for the most part they do it well. Their specialty is not mobile and not in the cloud.
The reason I think it would make sense is because Adobe does have products that are widely used in certain fields that can be used against comparable Apple products and Microsoft currently doesn’t really have anything to speak of in those markets to compete with.
Think beyond Acrobat, Flash and Shockwave. Microsoft FrontPage couldn’t compete with Dreamweaver, which is the application web developers around the world compare all other web design programs to. Photoshop is another obvious example and is one that, if Microsoft owned it, would give them better leverage in competition with Apple, particularly in the areas of graphic design and publishing.
If Microsoft owned Adobe Premiere, however, it would open up a whole new arena for them to compete with Apple. Microsoft primarily reigns in the business desktop market and really doesn’t have anything to speak of to compete with in the media industry, where Apple has dominated.
However, there is still something missing here. Such a rumor still doesn’t add up if we’re simply comparing Apples to Microsofts. This is why I don’t think Microsoft is really thinking about Apple here at all.
It’s Google.
Who is eating up Apple’s share of the mobile market now? Android. It happened very quickly too. It’s not an iPhone killer, of course, but it is now firmly entrenched in the mobile space – and that share is increasing.
Now that Google is doing TV and it’s going mobile as well, whose apps will be used to produce all that content and deliver it in a standard format to all the mobile devices and set top boxes emerging on the market? It may not be Apple, but unless they act quickly to buy their way into it or create something new, it certainly won’t be Microsoft.
Microsoft has already lost ground in the Search arena and Internet Explorer recently dropped below fifty percent market share for the first time. With a move to the cloud primarily controlled by Google as a backbone for current and future mobile devices such as phones, pads, netbooks, etc., Redmond needs to move fast or they are going to be left behind. Given that, a merge with or buy-out of Adobe would possibly make some sense.
But that’s only a rumor.
