The rumors are flying that Microsoft (MSFT) and Adobe (ADBE) have held secret talks about how to battle Apple (AAPL), with a possible acquisition of Adobe by Microsoft one of the topics.
Kara Swisher says that her sources call the acquisition concept "nonsense." Could the topic still have come up? Absolutely. And Swisher is quite right that serious acquisition talks at that level happen in quiet places out of the sight of all but executives and their lawyers. So what was going on? Some strategy that might fit in well with one major departure I think Microsoft has begun to make from its traditional business model.
For a clue, look at where the two companies stand. Although Microsoft does have the Xbox console product line and other games and entertainment as well as various types of business software, the company derives its position from powering computing on a fundamental level, whether operating systems, cloud platforms, or development tools.
There are signs that the company is trying to focus more. It finally acknowledged reality and did away with Microsoft Money last year. Then it got out of the desktop accounting package business (though keeping its small- to medium-sized major accounting/ERP/CRM offerings). Recently, Microsoft announced that it would switch from its own Windows Live blogging platform to WordPress.
In short, Microsoft has begun to admit that it hasn't been able to do everything and that sometimes partnering makes sense. It's a reverse movement from how the company operating for decades, starting with partnerships and then internally developing its own software to provide the same functions.
On that front, there is much that Adobe could offer in the way of licensed and maybe tailored versions of its media creation tools. Microsoft has its own creative platform -- the Expression line -- that is important to the company because it support using Silverlight, its Web application framework that is similar to, though nowhere near as popular as, Adobe Flash, and .NET, its software framework for building Windows apps. And none of the Expression products has anywhere near the audience of Photoshop, Dreamweaver, Illustrator, and other Adobe applications.
In addition, Microsoft does have Windows Phone 7 coming out, and it wants developers to pile on applications in hopes of catching up to Apple's iOS platform (i.e., the iPhone and iPad). Now that it looks as though Apple CEO like Steve Jobs is willing to let iOS developers use cross-platform tools, so they can develop applications for more than one smartphone at a time, perhaps Microsoft is trying to woo Adobe into support Silverlight.
Or, then again, maybe Steve Ballmer has come to realize that Silverlight isn't going to be the big win that the company hoped. After all, even Microsoft is shifting more support to HTML 5, which would eventually undermine the need for either Silverlight or Flash. Why not put support behind Adobe for the time being? After all, the amount of conspiracy theory shifts in alliances in the mobile space is already pretty extensive. There's always room for one more in the pool.
It's a pity, though, for humor. Just think of the names for the combination. Swisher mentioned AdobSoft and GooDobe. My suggestion: Microbe. Programming aficionados may now let loose with every joke about buggy software they can think up.
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