Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Adobe buying Omniture for $1.8 billion

The maker of Acrobat software says the acquisition will help it "transform" online commerce.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Ben Rooney, CNNMoney.com staff reporter

How have your health care costs changed in the past few years?
  • They've risen a lot
  • They've risen a little
  • They're about the same
  • They're down

NEW YORK (CNNMoney.com) -- Adobe Systems went shopping on Tuesday. And it came home with a pricey find.

The software company said it is buying Web analytics firm Omniture for about $1.8 billion in an effort to make itself more competitive in the world of online commerce.

The maker Photoshop and Acrobat products said it will offer Omniture $21.50 per share in cash. That's a 24% premium to Omniture's Tuesday closing price of $17.32 per share. The deal is expected to close in the fourth quarter of Adobe's fiscal year.

Omniture (OMTR), which is based in Orem, Utah, helps clients, including CNNMoney.com, understand how visitors traffic their Web sites and assists online businesses to target advertisements.

Adobe, which is based in San Jose, Calif. said the deal will help it "transform" e-commerce by combining its content creation tools with Omniture's online measurement and optimization technologies to help "increase the value Adobe delivers to customers."

"This is a game changer for Adobe and its customers," said Shantanu Narayen, chief executive of Adobe, in a statement. "We will enable advertisers, media companies and e-tailers to realize the full value of their digital assets."

Adobe said Omniture will become a new business unit within the company and that Josh James, Omniture's chief executive, will be put in charge of it as a senior vice president.

James said the combination of the two companies will allow for new strategies to improve "content engagement, advertising effectiveness and the overall user experience." That, he added, "will drive more advertising dollars online."

Trip Chowdhry, managing director of equity research at Global Equities Research, agreed that the acquisition is a "smart move" on Adobe's part because it may help offset declining revenues from the company's Creative Suite of software. However, he believes Adobe overpaid for Omniture because the company is losing market share to rival Google Analytics.

Also on Tuesday Adobe reported that it earned $136 million, or 26 cents per share, in the quarter ended Aug. 28. That's down from net income of $191.6 million, or 36 cents per share, a year ago.

Excluding certain items, Adobe said it earned 35 cents per share. Analysts surveyed by Thomson had forecast earnings per share of 34 cents.

Adobe (ADBE) shares fell to $34.26 in extended trading after closing at $35.19 in active New York trading.  To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Top luxurious hotel suites for business travelers For many people, you can't put a price on comfort. More
Million-dollar startups: These firms scored big sales their first year Their first year in business, these companies generated $1 million in sales. More
The 10 best states for retirees It might be worth moving to a new place to find your dream retirement home. Check out these 10 states. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play