It’s not causing quite the stir in the markets as when Microsoft bid on Yahoo, but speculation that the software giant might snap up Adobe Systems is turning heads. Even though equities analysts suggest little possibility of an acquisition, investors drove Adobe’s stock up in after-market trading Thursday.
After hitting a 52-week low, Adobe shares soared 12 percent Thursday after rumors of a clandestine meeting between the two tech companies hit Wall Street. The stock declined five percent Friday morning as skepticism set in. News reports told the story of behind-closed-door meetings between Microsoft CEO Steve Ballmer and Adobe CEO Shantanu Narayen.
Ballmer fueled the speculation when he declined to comment on the rumors at a conference in Madrid, Spain, according to the Associated Press. “If you are going to do something, you say nothing,” Ballmer said. “So I’ll be entirely consistent with standard CEO operating procedure.” Adobe also declined to comment.
The Microsoft-Flash Connection
Microsoft and Adobe have a common enemy in Apple. As reported in The Wall Street Journal earlier this year, Apple CEO Steve Jobs personally decided not to include Flash support in the iPad, insulting Adobe and opening the door for the software maker to find partners to rival Apple in tablet computers. Microsoft is launching its Windows Phone 7 Series operating system to compete with Apple’s iOS.
Rob Enderle, principal analyst at the Enderle Group, said both Microsoft and Adobe would need to be feeling desperate to agree to a merger, because Microsoft would have to shell out significant cash and Adobe would likely lose its identity. When Microsoft made its bid for Yahoo, the search company was in a desperate position — and it still refused the offer.
“Flash, this incredibly popular and powerful aspect of Adobe, is actually an ancestor to Microsoft Chrome, which was a product…