Adobe will buy analytics giant Omniture for $1.8 billion, the companies announced today. The acquisition will combine the world's dominant provider of design and content creation tools with a leading measurement and analytics company.
The deal will allow Adobe -- provider of Reader, Flash, Photoshop, and many other creative and content tools -- to expand into the rapidly growing online ad market. "This acquisition will significantly expand Adobe's addressable market and growth potential, broadening solutions Adobe provides to the rapidly growing Internet advertising, e-commerce and digital media markets," the company said in a statement.
The companies offered few specifics about their product integration plans. However, on a conference call discussing the acquisition, Adobe CEO Shantanu Narayen provided some hints.
"Clearly our customers would like us to do a lot more," he said. "Chief digital officers want to understand which video content is performing the best so they can feature it more prominently. Advertisers want to understand what click-through rates on their ads are in real-time, and Web developers have said they want to build intelligence so sites can recommend best products to increase conversion rates."
In the long term, it will let the company offer design tools that are integrated with optimization technologies from Omniture -- creating experiences that can morph in appearance in response to user behavior. One example might be the integration of Omniture's A/B testing capabilities with Adobe Flash, the platform used to create many rich media ads.
"Adobe will be well positioned to deliver solutions that can transform the future of engaging experiences and e-commerce across all digital content, platforms and devices," according to the company's statement.
Under the deal's terms, Adobe will buy Omniture's stock for $21.50 per share. After closing, Omniture will become a business unit of Adobe. Omniture CEO Josh James will lead the unit.
In its 2008 annual report, Omniture stated it had over 5,100 customers in 91 countries. Those customers include America Online, British Telecom, Disney, eBay, and Ford Motor Company, among many others. It said its services captured data from approximately 3.7 trillion transactions.
In 2008, Omniture reported a net loss of $44.8 million on revenue of $295 million. It had 1,189 full-time employees in December 2008.
For the fiscal year ended Nov. 28, 2008, Adobe reported net income of $872 million on revenue of $3.6 billion. It had 7,335 employees as of Jan. 19, 2009, according to its annual report.
UPDATE: This story was updated to include comments from Adobe's CEO.
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