Adobe paying $1.8 billion in cash for Omniture has a very, very high chance of being one of the worst Internet acquisitions ever. Pricey (5x sales/1.73 PEG/10x gross profit/26x operating cash flow for a $300 million business), in cash (almost 80 % of Adobe's cash), few synergies, fighting customer economics (only makes sense for e-commerce and maybe brand marketers, not for advertising-driven publishers) and fighting Google and other 'free' analytics providers that have strong incentives to subsidize analytics (a.k.a. pricing pressure is likely to increase).
Adobe could have spent far less cash and been far more customer-oriented by investing in better technical integrations with different analytics solutions rather than acquiring the high-end provider that a lot of Adobe customers don't use. Congratulations to Omniture, Adobe shareholders should beware.
2 comments:
I doubt it also but then I saw their picture and it looks to fit into productlines:
http://www.adobe.com/aboutadobe/invrelations/images/omgraphic.jpg
Of course its easy to draw pretty pictures but a lot of harder to make it work in practice
What cames to money, I totally agree thats high price. It was a bit like Ebay-Skype dejavu moment when I heard it first time
You're right about that. So it makes me wonder just what they hope to gain.
Do they need the expertise, will they start to make omniture a flashtracker as well? Or will they fremium the entire package?
Adobe isn't stupid as a company, or at least haven't been so far, so this deal is worth following closely.
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