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Adobe to buy Macromedia for $3.4 bil.



9:05 am on Apr 18, 2005 (gmt 0)

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From the Adobe site [adobe.com]:
Adobe Systems Incorporated (Nasdaq: ADBE) today announced a definitive agreement to acquire Macromedia (Nasdaq: MACR) in an all-stock transaction valued at approximately $3.4 billion.


7:50 pm on Apr 19, 2005 (gmt 0)

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...I think that was Intel, not Pentium. I know you know what I mean.

Huh?! Intel make the Pentium processor. Intel is the company, Pentium is their brand/trademark/regd trademark. For the purposes of this discussion Intel and Pentium are the same thing. I thought I knew what you meant. You were suggesting that MS had some deal with Intel and that every Intel Pentium based PC ships with Windows and that the government wasn't doing anything about it. Please correct me if I have misunderstood.


8:03 pm on Apr 19, 2005 (gmt 0)

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I said nothing about any government and yes Intel and pentium are one and the same. My error. Same problem though : )


5:58 am on Apr 20, 2005 (gmt 0)

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You kind of have to make a choice here, either governments force splits of monopolies and enable competition to happen again, or they don't, and you have to have monopolies.

I see you completely here but I suggest that we go one step further. Instead of breaking our own supposedly democratic principles to break up monopolies, why not discern what manoevres were taken to gain that monopoly, and, if they were in some way went against (rather under) "free market" rules, make laws to prevent the same thing from happening again?

I do understand the difficulty of this - we may even have to examine the very way we are educated about technology before we can decide what's "good" or "bad" for us and make resulting laws.


6:34 pm on Apr 20, 2005 (gmt 0)

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"why not discern what manoevres were taken to gain that monopoly, and, if they were in some way went against (rather under) "free market" rules, make laws to prevent the same thing from happening again?"

The United States and Europe both have such mechanisms in place, and have had them for a long time. The problem with high tech stuff is that companies like Microsoft, and IBM before them, took advantage of the total cluelessness of the legal system re high tech to obfuscate the issues, with lies. They also used strong arm tactics to keep witnesses from testifying against them, in MS's case, things like pulling advantageous licensing schemes if the company testified.

They lost most of the their cases, but because of the speed which high tech moves versus the speed of the legal system, in the end the victories were empty, since the market had already moved along further. Plus well placed campaign contributions in the last elections allowed MS to escape literally billions of dollars in penalties, and even a potential forced restructuring of MS, which is what Judge Jackson was pushing for. Probably one of the few honest judges out there when it comes to these types of cases, which is why MS hated him so much.

It goes well beyond these issues, but politics at that degree is against the TOS here so I'm not going to get further into it, except to note that where a company like MS was able to make a large campaign contribution to the incoming government, the penalty was essentially removed, but in the EU, where they do not have this access, they are facing much more serious penalties for similar antitrust charges.

Adobe is now in the same position, and I would expect similar behavior from them in the future.


8:54 pm on Apr 20, 2005 (gmt 0)

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But again I see that all the action you mention has come about after the monopoly is already in place. How they dismantle doesn't really matter as the dismantling itself is theoretically undemocratic and cannot in any way be done "fairly" - well, yes it can. Everything that was unfairly taken, after it was proven that it was indeed unfairly taken through already-existing laws that deem those acts unfair, should be given back to he who from which it was taken. With an adjustment for a real costs/services exchange between the parties. Don't you see what a quagmire that is and would and will be?

The fact is, no tactics can be proven underhanded or unfair if there exist no clear-cut laws that, in modern terms on the level with today's technology, define what unfair is and forbids it under pains of a clear-cut penalty.

I say again that it all comes down to education. Our schools are supposed to be teaching us all that's been proven and passed the test of time, yet after we leave there we are prey to whatever lies our ignorance would allow us to believe. In this way ignorance can apply to most anything, but in our age, most of all, it's technology.

[added] To keep my post from ending as an open rant, I'd like to add that I have no qualms with a company holding a major share of its market if its goal is to make the best product its market has to offer. Once one places money before the means of making it, there's no point in even exercising a trade anymore. It's in situations like this where a company who holds a leading place in a market without having a leading product should be taken down - by a better product.[/added]


2:52 am on Apr 21, 2005 (gmt 0)

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"It's in situations like this where a company who holds a leading place in a market without having a leading product should be taken down - by a better product."

That's the problem with monopolies, read the MS case histories, they wiped out smaller company after smaller company, Netscape is just one of the better examples, Netscape 1, 2 and 3 were significantly better than IE 1, 2 and 3, but Netscape sold them, so could keep developing. Then MS came in, using its money and market position, offered the product for free, to wipe netscape out. They were very worried about netscape's potential to become basically a thin client interface, bypassing the need for Windows, if I remember right, so they wiped them out. Once competition was eliminated, all development stopped, that's IE 6.

In the case of Windows, there have been a few small OS's that were wiped out by MS before they got off the ground, beos if I remember right was one. When a company is as big as adobe or MS, it's very difficult to compete with them, since they control the vertical supply chains, in MS's case, from hardware specs, hardware wholesalers, etc. Sometimes the control is indirect, like pulling favorable pricing deals to dell for example if Dell sells boxes with Linux on them, or whatever, or no OS at all. Try buying a dell box with no os and you'll see what I mean, that's a consumer box that is.

The laws do exist, they just weren't applied, both through technical ignorance, the speed of the court systems, and various corruption that happened and is happening along the way. The kind of strong arm tactics MS used to wipe out its competition are illegal, but the people who could have testified were too scared to do so. This was well documented in for example the Wall Street Journal at the time.


6:42 am on Apr 21, 2005 (gmt 0)

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You've got something else there - even if you've concocted the best product in the world, it's a helluva chore to get it "out there". Either you've already got the cash and press contacts for a huge ad campaign, or it's going to years of word-of-mouth before your product makes it past the "popular" mark. In the meantime, while you're still on your way up, all the giants already there can filch your ideas to tack them onto their product. Sound familiar?

I'm beginning to think about openSource software more and more - but I don't think the solution's there either. On one hand you have the 'money-oriented' giants trying to attach the biggest price tag possible to their products, no matter their real cost or value, to generate the biggest profits possible to weild their company with the most financial weight possible. That's clear and that's fine, again, if that financial might is used to the benefit of the product itself and nothing else. But on the other hand... I really don't know enough about openSource to comment - I only know how the knowledge flows. In fact, I haven't a clue how they make their money.

It really would be optimal if we who used the product could have a say about what's good or bad about it to make a better one - and be sure that any changes made would be to optimize its quality and not some manoeuvre to force some change onto the market. In fact, I'd feel very comfortable giving my dime to that sort of set-up. Shareware is almost there in that way... LOL I make it sound like a communist scheme, but I'm for all who make a product out of interest for the product and nothing else. This is where real quality lies.


5:36 pm on Apr 21, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

"while you're still on your way up, all the giants already there can filch your ideas to tack them onto their product."

Not only can they do that, they do do that. One of the really funny things about Microsoft's campaign against open source is their refrain, oh, but you could get sued for ip violations. If Windows or any other major program were opened and studied in depth, how many ip violations do you think you would find? How many routines and sub programs that MS had 'studied' before turning down do you think are in there? This by the way has happened many times, MS requests the code for a product they are thinking of buying, then 'reject' it, give the developer nothing, and implement the code. Since MS code is closed, nobody can look at the whole package, and legal challenges that might force that are very expensive.

And, more importantly, can kill your career, which is what MS counts on more often than not, like: oh, so you want to fight the big boys... hope you have a big bankroll, we do.

MS has a profit margin of about 30%, it's I think around 50% on Windows and Office. No major company I know of out there has that type of profit margin year in and year out, that's what a monopoly does for you. Well, maybe the big oil companies this last year.

Open source is the current solution, it's not a perfect solution, but the alternative is worse as far as I'm concerned. As to how they make money, the main guys all do fine, as would any good programmer. If you develop a small application, you get better and better at programming, if many eyes are on it, you get better and better feedback, it's a learning curve, and when you are a better programmer, that can only help you in the job market.

Sometimes an open source project is a college project, which is then handed off to someone else, sometimes it's a lifetime vocation.

Way off topic here, sorry about that, anyway, take a look at the gimp, it's not as slick as photoshop, but it's pretty servicable, I've seen some amazing website designs come out of it, so it's definitely production useable.

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