Adobe Jumps on Web-Hosting Bandwagon With Buzzword Buy

Adobe Systems is buying the maker of the Buzzword Web-based wordprocessing software, marking a shift in strategy for the maker of Flash and Acrobat and setting up a showdown over Internet-based applications with the likes of Microsoft and Google.

Adobe will purchase Waltham, Mass.-based Virtual Ubiquity and said the move is part of a larger push to create a rich Internet application, or RIA, platform. It did not disclose terms of the transaction.

In conjunction with the purchase — announced during the Adobe MAX 2007 conference in Chicago — Adobe said it added new file-sharing service to its menu of online document applications. Known as “Share,” the free service — available in beta form — is designed to make it easier for users to create, share and publish online documents.

Extending the Franchise

Those services are a logical extension of Adobe’s franchise — the Acrobat Portable Document Format (PDF) document sharing software, said David Mendels, Adobe’s senior vice president for business productivity products.

Acrobat has been the “standard way people share and collaborate on high value documents across platforms, with perfect fidelity, he noted. Buzzword will build on that leadership and enable fundamental improvements in how people collaborate on documents.

Along with RIA, Buzzword “raises the bar for the quality of experience people should expect in their applications,” Mendels added.

Merge Ahead

Adobe hopes to close the acquisition before the end of next month, it said, adding the purchase will not have a material impact on 2007 earnings and revenue.

Adobe shares were up about half a percent in afternoon trading Tuesday to US$44.22.

The moves seem to set the software maker on a collision course with Microsoft and Google, which are among the companies that see a future where virtually all software products are Web-hosted.

Google moved into the arena in a big way when it bought Web-based word processing tools Writely and wiki-maker JotSpot, now part of the Google Apps package, which includes a presentation tool meant to go head-to-head with Microsoft’s PowerPoint. Microsoft has also announced its intentions to offer hosted versions of its productivity tools through the Windows Live initiative.

The Web-hosting trend is unmistakable, Forrester Research analyst Erica Driver told the E-Commerce Times, noting that it will play an important roles in IT organizations moving forward.

The fact that Microsoft — which in theory has the most to lose as a top seller of packaged productivity applications — is on board with the approach underscores that enterprises are becoming increasingly interested in having software delivered in new ways.

Familiar Foundation

Buzzword is a logical fit for Adobe because it was built on Adobe’s Flex software and runs in part on its Flash Player technology. The result, Adobe says, is an application that has more options than other Web-based word processors. Multiple users can create and edit documents at the same time and adjust formatting and other features on the fly. The application can also be used offline.

Adobe will keep as many of Virtual Ubiquity’s employees as possible, it said. The firm’s CEO, Rick Treitman, said the collaborative Buzzword was built with so-called Web 2.0 innovations in mind.

“We were inspired by the way today’s youth spend their lives working and playing together online, and how this is influencing the way we all think about collaboration,” he said. “This inspiration resulted in an online word processor for the ‘Facebook generation’ that focuses on working together online, without sacrificing quality.”

Adobe has a strong foothold among creative professionals, with its Creative Suite widely used in publishing, printing and graphics settings. It may be under pressure from Google’s Web apps foray as much as Microsoft, Sterling Market Intelligence analyst Greg Sterling told the E-Commerce Times.

Connecting Offline and Online

Google Docs is designed to eliminate the kind of cross-platform compatibility issues that made PDF such a popular way to send documents to users on different computer systems, he noted. While Adobe’s core high-end application business is safe, and unlikely to be moved onto the Web, the ubiquity of PDF in the future could be in question thanks to increasing comfort among users with Internet-based programs.

If nothing else, Adobe gets huge brand awareness from having Acrobat used so heavily, Sterling noted. The move, meanwhile, recognizes that the Internet will be the delivery vehicle for more than just content and services in the future. “Connecting offline and online is a very shrewd business move at this stage,” he added.

In fact, Adobe is pushing its AIR platform as a way of extending the Internet to the desktop in a host of ways, enabling users to go on and offline while continuing to work on documents that are shared and published via the Web.

For instance, Adobe announced eBay would offer a tool that extendsinformation and applications from the Web browser to the desktop. It also announced a partnership with Business Objects to develop tools to create documents in which data could be updated in real time.

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