{{ searchResult.published_at | date:'d MMMM yyyy' }}

Loading ...
Loading ...

Enter a search term such as “mobile analytics” or browse our content using the filters above.

No_results

That’s not only a poor Scrabble score but we also couldn’t find any results matching “”.
Check your spelling or try broadening your search.

Logo_distressed

Sorry about this, there is a problem with our search at the moment.
Please try again later.

If M&A activity is a good indicator of the health of the economy, there's hope for a recovery, at least in tech. Newsworthy acquisitions are becoming more frequent and yesterday saw a billion-dollar deal with Adobe's announcement that it is purchasing business optimization software provider Omniture.

The deal, which is valued at $1.8bn, was hailed by Adobe CEO Shantanu Narayen as "a game changer for both Adobe and our customers". And it better be, as Adobe's offer of $21.50 per share for Omniture stock represents a 24% premium to Omniture's closing price on Tuesday.

But while analysts and observers might question whether Adobe is paying too much for Omniture, the acquisition makes a lot of sense. Adobe's Q3 earnings showed continued weakness in the company's primary market as the recession trimmed demand for Creative Suite 4. All told, revenue declined 29% year-over-year in the third quarter, although Adobe was able to beat analyst expectations slightly.

But Adobe's future growth may not be as dependent upon software sales. How does Omniture fit in to Adobe's plans? Narayen explained:

Adobe's Creative Suite products and Flash platform help customers create and deliver engaging experiences. The addition of Omniture's online marketing suite will help customers measure, analyze and optimize the impact and value of those experiences.

It's a smart move for Adobe and one that may mean more to the company's future than many expect. Tom Sullivan, who writes a blog called No Turn on Red, has some insightful comments that speak to this:

First, realize that Omniture is not just an analytics company. Sure, that may be what they are known for – but they have many components of their software suite that work seamlessly with each other. Omniture also does merchandising, recommendations, website testing, and site survey – all tasks that are analytic driven. Many of these components are used by e-commerce retailers and I know several retailers that love their packages.

Second, realize that Adobe has already stepped into the e-commerce world when they acquired Scene7 in 2007. Scene7 is a fantastic solution for managing images for retailers. (I’m not rehashing some Adobe marketing, I’m speaking as a developer who’s used Scene7 – I really like this software). Scene7 is now used by many, many retailers around the world to dynamically serve their images.

Sullivan predicts that by the end of 2010, there will be a "major acquisition by Adobe of an e-commerce platform". To him, going after the e-commerce market head on is a no-brainer for Adobe.

While I won't make any bold predictions of my own, I agree with the general belief that Adobe is no longer just a vendor of expensive software. It does have significant opportunities in other markets and through some strategic acquisitions over the years has positioned itself to take advantage of them. If it does, watch out.

In the meantime, let the M&A (and chess games) continue.

Patricio Robles

Published 16 September, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2378 more posts from this author

Comments (9)

Comment
No-profile-pic
Save or Cancel
Avatar-blank-50x50

Fergal O'Mullane

I think the acquisition of Omniture is a smart move by Adobe, they are joining the dots in the value chain.

Not so sure about Tom Sullivans view on them acquiring an ecommerce platform though, I can't see the strategic benefit in aligning themselves with a single platform.

almost 7 years ago

Brian Clifton

Brian Clifton, Author, CEO & Web Metrics Strategist at Advanced Web Metrics

Like everyone else, I certainly did not see this coming... It reminds me of Telefonica's $5.4 billion mind blowing purchase of Lycos in 2000. A good sales person can make it sound like a perfect match and a bargain to boot. Yet for me, it does not appear a good fit.

The web analytics market is moving away from big, expensive software projects where you pay simply to collect data. The model is now about collecting data for free (computer memory, disk space and processing power are getting cheaper each year). This has been driven mainly by Google, but also adopted by Microsoft (though that failed) and more recently Yahoo.

The model is, collect data for free and instead use your budget on insights - understanding and taking action. Avinash Kaushik has been banging this dum this since 2004 - he calls it his 10/90 rule i.e. spend 90% of your budget on insights and action and 10% on the technology. For a free product, the 10% is the resource required to implement.

So Adobe's move of paying big bucks for Omniture and its 5000 or so clients is in the opposite direction...

almost 7 years ago

Avatar-blank-50x50

Richard Dowden

They've already acquired an ecommerce platform already though? They bought BusinessCatalyst late last month.  Admitedly their ecommerce platform isn't massive, and only forms part of the BC offering, but overall it's a great solution for SMEs. It'll be interesting to see how they plan on merging all of these products together, and who the resultant product will be aimed at.

almost 7 years ago

Avatar-blank-50x50

Rick Frandsen

It seems like a whole lot of money to buy a company that is losing money year over year. And, half their book assets are "goodwill". Someone is seeing something I am not seeing.

almost 7 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy

Brian,

Isn't there almost always a market for higher-end solutions? I'm pretty sure that Omniture's analytics solutions go well beyond what you might get from Google Analytics or other free solutions. I was under the impression that their products were designed to do some of the analysis/action-taking that you speak of?

Richard,

Interesting catch. I hadn't even heard of that acquisition. Will be interesting to see how that fits in.

almost 7 years ago

Brian Clifton

Brian Clifton, Author, CEO & Web Metrics Strategist at Advanced Web Metrics

Hello Patricio

I am going to say no to that question (slightly provocatively). Collecting data is so fundamentally simple that in today's "cloud computing" network environment it can, and is, being commodatised.

Providing high-end services is a different matter - professional implementation, customising, education, analysis, optimisation, consulting etc. are all fee based and is where the money is.

There is plenty of space for multiple web analytics vendors, I just don't see a future for a company that charges for data collection. Then again, perhaps Adobe will make Omniture available for free...

My further thoughts are here: http://www.advanced-web-metrics.com/blog/2009/09/16/did-you-see-adobe-coming/

almost 7 years ago

Stephen Pratley

Stephen Pratley, Digtal Marketing Consultant at Visibly Better Marketing Limited

Omniture now goes far beyond gathering data into turning it into insight, particularly with their merchandising tools, and an analyst who costs 9x a typical Omniture bill will demand more than you can get from Google Analytics. I'm pleased that the move has happened, if only that it will mean a major player in the design world will start banging the drum about testing, ROI and accountability. I'm not sure about the Business Catalyst acquisition though, they are aimed at a very different market from the kind of client who will pay for the premium that Omniture charge over a typical Google Analytics user. I'd have though that someone like Varien - now they have released their Enterprise Edition of Magento - would be a better fit. I can't see many people adopting this as an end-to-end solution, but it might help Adobe-based designers start to try to tackle low-end eCommerce projects. If they started bundling Omniture, with all their merchandising features, with GoodBarry, then I'd sit up and listen!

almost 7 years ago

Avatar-blank-50x50

UX Associates

I actually think it is a great synergy (only time will tell on the $1.8B pricetag). Omniture's products expand way beyond web metrics and really focus on end-to-end optimization of all channels (email, search, web, etc.) and bring it in to a unified platform. They have a great recurring revenue stream from the majority of the Internet Retailer Top 500 ranked companies and also do all of the high-end professional services you mention as well. I read that they did $25 million in training for one company alone.

At most compnaies I have worked with, there has always been a big rift between the folks that collect/report data, the folks that develop the insights, and then the people who have to develop/code/design the website. In other words, web designers are not data heads and analytical folks are not creative type. I am anxious to see how Omniture & Adobe can bring these gaps a lot closer together.For example, a designer while designing a landing page for a DVD player campaign will know from within the Adobe tools the best layout, headlines, product images, and all the other elements that are tested & analyized via Omniture. Once that page is launched, it will be self-optimizing based on real-time analytics and adjust design, layout, messaging, etc accordingly.

Lastly, I think that we are just on the forefront of optimizing the web. Many companies live and die by this practice like Google & Amazon, but I am amazed by the number of large e-commerce comapnies that I know first hand do little or no real optimization - just trial & error by opinion.

almost 7 years ago

Rob Mclaughlin

Rob Mclaughlin, VP, Digital Analytics at Barclays

This acquisition should not come as a surprise to anyone - every analytics company in existence has been batting their eye lashes at the larger software players.

In fact, within 5min of meeting any member of senior management at WebTrends, Coremetrics, Nedstat etc you will be hearing about their strategy to be bought.

Don't forget that Omniture is really largely the product of several acquisitions itself!

almost 7 years ago

Comment
No-profile-pic
Save or Cancel
Daily_pulse_signup_wide

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Daily Pulse newsletter. Each weekday, you ll receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.