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July 11, 2005 7:47 AM PDT
DOJ to examine Adobe-Macromedia deal
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The Justice Department apparently is taking a closer look at the competitive landscape for multimedia content tools. Specifically, officials have requested additional information on both companies' Web-authoring design and vector graphics illustration products, the companies said.
Adobe announced in April that it intended to buy Macromedia in an all-stock deal valued then at $3.4 billion. The company is seeking to expand the breadth of tools it offers and distribute multimedia content over a number of operating systems and devices.
The deal comes as Adobe, a market leader in electronic documents with its PDF software, is beginning to face greater competition from open-source players entering the market. And, of course, the multimedia tools designer is keeping a watchful eye on software giant Microsoft.
Despite regulators' request for additional information, Adobe still anticipates the deal will close this fall, the company stated.
Large mergers are often subject to close scrutiny by federal antitrust regulators, particularly if the companies involved serve the same markets.
"It's not unusual to see a second request (for information) in cases were the parties serve the same market, especially in software," said attorney Connie Robinson, who heads up the antitrust department at Kilpatrick Stockton. "Unlike a widget, where you can see it and touch it, software is harder to get your hands around and understand."
The request is considered a second request, because--as is standard among companies contemplating a merger--Adobe and Macromedia have already submitted preliminary information to the department.
Regulators are interested in reviewing what effects a merger would have on the industry's other players and on the the competitive landscape overall--and how changes would affect pricing, and hence, customers.
Even if Justice Department officials challenge a merger, as in the case of the Oracle-PeopleSoft deal, it does not necessarily kill the transaction. Companies sometimes prevail despite challenges from the government.
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Macromedia's products in order to preserve what little competition
there is.
There was a time when companies were prevented from becoming monopolies and were broken up when it was evident they were: think of Ma Bell.
Preventing monopolies from forming, however, has long been done only in discussion, not in fact. Not all that long ago, the war in insurance broking got to the point that only two global brokerage giants remained. Acquisitions were investigated, as this one is being, by the FTC and European Trade Commission, but ultimately were allowed to happen.
These monopolies are disturbing for many reaons. The one that bothers the most is that in the absence of competition, innovations and improvements to products become minimal.
If you're older, and were involved in technology back to when the first PCs and Macs were made, you probably know how this happened with word processing. In the beginning the companies which produced word processing software had to work to keep their products more useful than those of their competitors. As time passed and these companies acquired one another, the need to do this trickled down to nothing.
MS Word has no real competition any more. WordPerfect, Lotus WordPro and other applications all had features which far exceeded those in MS Word, but once the need to compete was no longer there, the need to improve Word no longer existed.
To date, Lotus WordPro (now an IBM product which is for the most part ignored and certainly not marketed) has features which are by far more efficient than their counterparts in Word, but MS has no reason to do anything about this.
Oh well, there's my rant.
Now the big question is will they just be able to kill the unwanted apps like GoLive or will they have to sell them off. Since the government proved handle things so well with Microsoft's anti-trust case I am willing to be they will be able to keep them and pull out features to put in the apps they are going to continue to update and market.
Robert
Macromedia's products in order to preserve what little competition
there is.
There was a time when companies were prevented from becoming monopolies and were broken up when it was evident they were: think of Ma Bell.
Preventing monopolies from forming, however, has long been done only in discussion, not in fact. Not all that long ago, the war in insurance broking got to the point that only two global brokerage giants remained. Acquisitions were investigated, as this one is being, by the FTC and European Trade Commission, but ultimately were allowed to happen.
These monopolies are disturbing for many reaons. The one that bothers the most is that in the absence of competition, innovations and improvements to products become minimal.
If you're older, and were involved in technology back to when the first PCs and Macs were made, you probably know how this happened with word processing. In the beginning the companies which produced word processing software had to work to keep their products more useful than those of their competitors. As time passed and these companies acquired one another, the need to do this trickled down to nothing.
MS Word has no real competition any more. WordPerfect, Lotus WordPro and other applications all had features which far exceeded those in MS Word, but once the need to compete was no longer there, the need to improve Word no longer existed.
To date, Lotus WordPro (now an IBM product which is for the most part ignored and certainly not marketed) has features which are by far more efficient than their counterparts in Word, but MS has no reason to do anything about this.
Oh well, there's my rant.
Now the big question is will they just be able to kill the unwanted apps like GoLive or will they have to sell them off. Since the government proved handle things so well with Microsoft's anti-trust case I am willing to be they will be able to keep them and pull out features to put in the apps they are going to continue to update and market.
Robert
It would create stability, encourage creativity and innovation, and lower taxes if the DOJ would simply deal with the extremists in the USPTO/USTR who have been creating the problem in the first place.
Software should only be granted a temporary copyright monopoly on the specific implementation, with no exclusive rights of any type on interfaces or algorithms. It should be the right of a competitor to reverse engineer any existing software to make compatible software, or even a clone of the software. Given the speed of software evolution, it would also be appropriate if the copyright only lasted a fixed 20 years from first authorized publication. Having 50 or 75 years past the death of the often unknown software author might as well be the infinity minus a day the extremists have asked for.
It would create stability, encourage creativity and innovation, and lower taxes if the DOJ would simply deal with the extremists in the USPTO/USTR who have been creating the problem in the first place.
Software should only be granted a temporary copyright monopoly on the specific implementation, with no exclusive rights of any type on interfaces or algorithms. It should be the right of a competitor to reverse engineer any existing software to make compatible software, or even a clone of the software. Given the speed of software evolution, it would also be appropriate if the copyright only lasted a fixed 20 years from first authorized publication. Having 50 or 75 years past the death of the often unknown software author might as well be the infinity minus a day the extremists have asked for.