16 September 2009 | Author: L. Sutherland News Editor

Adobe to buy Omniture for $1.8 billion

Software stalwart Adobe looks set to make an acquisition to turn around slipping sales as reports reveal that it is to buy Omniture.

The creator of Photoshop and Acrobat could shell out $1.8 billion for fast-growing business software maker Omniture at $21.50 a share - a 24 per cent premium. According to Reuters, the deal was announced on Tuesday and resulted in a 25 per cent rise in Omniture shares and a 4.5 per cent drop in Adobe's.

Adobe also revealed its earnings fall for the third quarter and, despite beating expectations, the software company, like many others, has been struggling at the hands of the recession. The tendencies of consumers to put off upgrading to new versions of their software couldn't fail to impact Adobe, but it's possible that Omniture's fee model could help Adobe keep its books balanced.

While Adobe sells versions of its design suites and popular software products outright, Omniture instead charges a fee which is determined using the amount of traffic the customer's website draws. Furthermore, Omniture's software is utilised by advertising agencies and a number of other companies who wish to analyse the way that consumers are using their websites. It is currently one of the biggest companies competing in this field, bar Google.

Global Equities Research analyst Trip Chowdhry told Reuters that "There is no way Adobe can grow organically. This is a smart move."

The popularity of Adobe's products means that a large proportion of websites are designed using products from Adobe's Create Suite line and, if this can be used as a platform to encourage buyers to also subscribe to Omniture's services, a more weather-proof business model could be created for the future of the software creator.