This month we had the opportunity to catch up to Thad McIlroy, editor and founder of "The Future of Publishing", a highly regarded website that monitors news on the digital publishing front and where digital publishing is heading. Thad recently released an in-depth report titled, "Adobe's Designs on Web Analytics: The Omniture Acquisition" which is available at The Future Of Publishing site.
The 55-page report examines everything from the financial position of each firm to the full rationale for the acquisition. The report also fields questions surrounding the acquisition including:
Ominiture sells enterprise software at prices far beyond Adobe's current offerings. Can Adobe integrate such a disparate company into its core business?
Web metrics is a completely new technology for Adobe. How will it integrate this distinct technological offering?
How will Adobe defend against the current competitors and the new competitors that will certainly emerge?
Adobe and Omniture announced the 1.8 billion-dollar agreement in September and said the acquisition would expand Adobe's market and growth potential, broadening solutions Adobe provides to the Internet advertising, e-commerce and digital media markets. "This is a game changer for both Adobe and our customers. We will enable advertisers, media companies and e-tailers to realize the full value of their digital assets," said Shanatanu Narayen, president and CEO of Adobe.
The completion of the transaction, is expected to close fourth quarter of Adobe's 2009 fiscal year.
For our interview with Thad, we wanted to get his take on the purchase and some of his predictions for the future in terms of the deal.
Planet PDF: You're a longtime/print publishing veteran and called Adobe's acquisition of Omniture, "the most fascinating purchased I've examined in many years of business," -- can you tell us why you think Adobe has "driven its car into a canyon?"
Thad: I'd separate that question into two parts: Stating that "Adobe's intended acquisition of Omniture is the most fascinating purchase I've examined during my many years in this business" refers to a very specific issue: this is a very big departure for Adobe from its usual (and very numerous) acquisitions. Those have mainly been companies with software that could directly complement Adobe's existing offerings, or its strong push into web and mobile publishing.
Omniture is exclusively a web analytics firm, with technologies and processes very new to Adobe and its customers.
Because the acquisition is so unusual for Adobe it prompted me (and many others) to question the reasoning behind the 1.8 billion dollar spend. How could we not? The purpose of the report is to examine the wisdom of the acquisition and consider the upside and downside scenarios.
Planet PDF: Adobe has said, "The combining of the two companies will increase the value it delivers to its customers," what's your take on that?
Thad: I think you've hit the nail on the head with that question. As my report examines in-depth what Adobe is undertaking with Omniture is largely untested, not merely because it never occurred to anyone, but because it creates a workflow shift. I describe scenarios in my report where the combining of two companies COULD increase the value Adobe delivers to its customers, but as this is new I have to state conservatively that Adobe is making an unproven claim. It's not without basis in fact, but it REMAINS unproven.
Planet PDF: How will Adobe move its customers into Omniture
Thad: That's a very big question, and an important one. I found Adobe's executives largely unprepared to provide a cogent answer. In their defense, these are the early days. On the other hand, would you spend nearly $2 billion without an answer to that question
Planet PDF: Can you also talk about how this purchase might affect or empower the usage of PDF analytics in the future
Thad: I do place a particular focus on PDF analytics because I've become quite familiar with Vitrium Systems who are pioneers in this field, and they have an available product that demonstrates, even if imperfectly, how important analytics in a PDF file can be. They're a small aggressive company and have certainly been ahead of Adobe in addressing this particular challenge.
Clearly PDF is only a fraction of what makes the Web so vital, but it's not a small fraction; there are hundreds of millions of PDF documents across the Internet, and Adobe's failure to add metrics to them could become a major win with Omniture. In the meantime, there's Vitrium.
Planet PDF: Can you talk about the report and how readers will benefit from it as it's still very timely in terms of the acquisition being completed in 4th quarter? (Those who download the report will also get updates without charge in terms of the ongoing developments
Thad: It's changed. When I first decided to create the report I imagined it of interest mainly to financial analysts and those who cover Adobe as a financial entity, regardless of any technology it may champion. However, the real beneficiaries of the report are all Adobe customers for Creative Suite because it is the first non-Adobe sponsored report that explains in clear language how the Omniture investment impacts them as major Adobe stakeholders.
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