Adobe Systems Inc - Focus On Internet Publishing

Depending on its recent acquisition of Web tools manufacturer Ceneca Communications to prove fruitful, Adobe shifted focus in 1996 to Internet publishing and converted the popular PDF into a Web format. Sales neared the $1 billion mark in 1997. Recession-ary economic conditions in Japan undercut earnings in 1998, spurring Adobe to lay off roughly 10 percent of its management staff and place more of an emphasis on creating new products, particularly those that would help secure the firm's position as a key player in Web authoring tools. More than $207 million—roughly one-quarter of sales—was earmarked for research and development. The firm also hunted for strategic acquisitions like GoLive Systems Inc., a maker of Web development and design tools that it purchased early in 1999. The GoLive technology allowed Adobe to later launch its award-winning Live-Motion program, a graphics and animation manipulation software package for both novice and expert Web page designers.

Believing that electronic books, particularly educational and professional publications, would become a key online market, Adobe began developing software for displaying such books. It also sought ways to protect authors, publishers, and other parties from the illegal distribution of copyrighted material—a major issue for book vendors considering a move into electronic commerce. In 1999, the firm unveiled PDF Merchant, which allows publishers to prevent individuals from downloading PDF files until they have purchased the right to do so. Once payment has been received, the document in question is sent directly to the recipient's hard drive. Web Buy, an Acrobat "plug-in" program, is attached to the document to thwart unauthorized distribution by prompting the recipient of such a file for payment prior to allowing access.

Adding to its e-books holdings, Adobe purchased display software manufacturer Glassbook Inc. in August of 2000. Adobe Content Server, a program that allows book merchants to sell e-books in a secure format online, was launched the following year in conjunction with the Adobe Acrobat e-Book Reader, a product based upon the Glassbook Reader. Along with granting users electronic access to books, with both text and graphics in PDF, the new software also offers searching, marking, annotating, and other interactive capabilities.

By 2001, Internet publishing products accounted for more than 50 percent of Adobe's revenues. More importantly, Adobe's presence on the Internet was prolific. In the October 2000 issue of Forbes Elizabeth Corcoran wrote, "Pull up the Bridgestone/Firestone Web site to learn about defective tires and it tells you to use Adobe's free Acrobat Reader to see a graphical interpretation of the hieroglyphics on your tires' sidewalls. On ESPN's extreme sports site teeth-gritting images have been tweaked with Adobe tools. At Barnes & Noble on the Web you will find e-books viewable with readers from Microsoft and Adobe." In fact, says Corcoran, more than 90 percent of all Web sites make use of Adobe's Photoshop software, while nearly three-fourths of all Web pages are designed with Adobe Illustrator.

Seeing the development of strategic alliances as essential to remaining at the forefront of Internet publishing technology, Adobe continually seeks to establish relationships with other key players. For example, in the second half of 2000 Adobe integrated its Go-Live software with WebTrends Corp.'s Web tracking technology. This allowed clients creating Web sites with GoLive the ability to monitor things like site traffic. At roughly the same time, the firm reached a similar technology integration agreement with e-commerce software and services provider Allaire Corp. Future plans include the creation of Adobe Studio—a Web site that allows Adobe software users to share technology and ideas, as well as to post and find jobs—and the development of technology that allows electronic documents to be published on cell phones, palm pilots, and other mobile devices.