Comments for Adobe Acquires Omniture: It's All About the Revenue Model

Adobe Acquires Omniture: It's All About the Revenue Model

2009-09-16T17:40:53Z

Adobe is looking to stall falling sales and profit by entering into a new market: analytics. But rather looking to R&D, Adobe is instead coughing up $1.8 billion for analytics leader Omniture. This is the largest acquisition by Adobe since the purchase of Macromedia for $3 billion in 2005.

The acquisition has puzzled many, since Adobe and Omniture products really have no natural cooperation. There have been comments about the measurement capabilities that Omniture will give to content built with Adobe products. But in the end the entire deal revolves around two words: recurring revenue. Adobe's quarterly earnings have fallen due to declining sales of software licenses, and the SaaS model of Omniture will bring the company a recurring stream of revenue.

]]> Omniture is a top dog in analytics. But even though it competes with just about everyone, including Google, in the measurement market, some industry analysts have pointed out that it's really run out of new ideas. In trying to explain the acquisition during an earnings call, Adobe CEO Shantanu Narayen asserted that buying Omniture was meeting customer needs.

What we found is that as we've been talking to our customers, it's clear that they would like us to do a lot more. For example, the chief digital officers that we talk to at media companies have been telling us that they want to understand which content was performing the best so that they could feature it more prominently and increase their ad revenue.
Advertisers and agencies were using Flash to produce rich ads but they were telling us that they really wanted to understand what the click-through rates of those ads were in real time, to be able to take more advantage of it.

But few analysts have agreed that adding measurement power to content is really the core of this deal. Adobe announced the acquisition alongside a decrease in quarterly earnings. Even if Omniture is no longer at the forefront of innovation in analytics, its steady stream of revenue from SaaS subscriptions is a cash cow that Adobe can't afford to pass up right now.

Comment from formula 21 on 2011-03-05

2011-03-05T17:37:00Z

I was surprised by the volume of people saying "huh? that doesn't make sense" the acquisition makes perfect sense to me.

Comment from altın çilek on 2011-02-22

2011-02-22T16:32:08Z

I was surprised by the volume of people saying "huh? that doesn't make sense" the acquisition makes perfect sense to me.

Comment from orjin krem on 2011-02-18

2011-02-18T14:41:27Z

It seems to me that Adobe is clutching at straws in a desperate bid to stay alive. Sad how the mighty have fallen

Comment from İzmir erotik shop on 2010-11-15

2010-11-15T20:55:26Z

Çalışma için teşekkürler. Güzel bir çalışma olmuş. Emeği gecen herkese teşekkürler.izmir erotik shop

Comment from Cinsel on 2010-11-15

2010-11-15T20:53:17Z

Bu zamana kadar içerik bakımından incelediğim sitelerin en başarılı olanlarından. Başarılarınızın devamını dilerim.cinsel

Comment from Vibratör on 2010-11-15

2010-11-15T20:50:45Z

Paylaşım çok güzel. Emek ve zaman harcandığı belli. Bilgilendirici ve yönledirici konular hakkında diğer yazılarınızı sabırsızlıkla bekliyorum. Site yönetimine sonsuz teşekkürler.vibratör

Comment from Sex Shop İzmir on 2010-11-10

2010-11-10T17:01:43Z

Bu güzel paylaşım için emeği geçen herkese teşekkürler. Çok güzel ve bilgilendirici bilgiler var.sex shop izmir

Comment from Afrodizyak on 2010-11-10

2010-11-10T16:57:04Z

Başarılarınızın devamını dilerim. Güzel paylaşım için teşekkürler. Böyle bilgilendirici sitelerin olması, bizlere destek oluyor saolun. Emeğinize sağlık.afrodizyak

Comment from Erotik Shop İzmir on 2010-11-10

2010-11-10T16:54:27Z

Bu güzel anlatım için teşekkürler. Çalışmalarınızdaki özen bizi çok memnun ediyor. Bu işi layıkıyle yapan insanların emekleri bizler için çok önemli. Çalışmalarınızın devamını dilerim.erotik shop izmir

Comment from Sex Shop İzmir on 2010-11-10

2010-11-10T16:37:15Z

Bilgilendirici yazılarınız, site içeriğiniz gerçekten çok güzel. Üzerinde emek harcandığı belli. Bu güzel site için emeği geçen herkese teşekkürler.sex shop izmir

Comment from Penis Büyütücü on 2010-11-10

2010-11-10T16:33:39Z

Sitedeki bilgilendirici makaleler mutlaka okunmalı. Kendinizi geliştirmek adına önemli bilgiler var. Paylaşım için teşekkürler.Sitedeki bilgilendirici makaleler mutlaka okunmalı. Kendinizi geliştirmek adına önemli bilgiler var. Paylaşım için teşekkürler.

Comment from Sisme Bebek on 2010-11-10

2010-11-10T16:27:48Z

Başarılarınızın devamını diler, bu şekildeki bilgilendirici siteleri yapan kişilere çok teşşekür ederim. İçerik bakından incelenmesi gereken önemli bir site arkadaşlar. Tavsiye ederim..!şişme bebek

Comment from Vibratör on 2010-11-10

2010-11-10T16:24:18Z

Comment from Prezervatif on 2010-11-10

2010-11-10T16:20:09Z

Bu tür siteleri hazırlamanız çok güzel. İçerik bakımından bilgilendirici, çalışma değerleri bakımından kullanışlı. Özen gösterildiği belli oluyor. Site yönetimine paylaşım için teşekkürler.prezervatif

Comment from Türker on 2010-11-10

2010-11-10T15:36:16Z

Comment from Türker on 2010-11-10

2010-11-10T15:28:42Z

Paylaşımların içerikleri çok güzel. Zaman gecirmek ve bilgilenmek için zaman harcanabilecek bir site. Kendimizi geliştirmek adına takip etmemiz gereken bir site. Site yönetimine ayrıca teşekkürler.
afrodizyak

Comment from azdırıcı on 2010-11-10

2010-11-10T15:22:15Z

Gerçekten emeğinize sağlık güzel çalışma. Devamının gelmesi, bilgilendirici makaleler okumak çok güzel. İyi çalışmalar.
azdırıcı

Comment from watch live football on 2010-09-15

2010-09-15T16:15:53Z

It seems to me that Adobe is clutching at straws in a desperate bid to stay alive. Sad how the mighty have fallen....

Comment from Cep telefonu on 2010-08-22

2010-08-22T15:33:11Z

I was surprised by the volume of people saying "huh? that doesn't make sense" the acquisition makes perfect sense to me.

Comment from Kontör on 2010-08-22

2010-08-22T15:32:01Z

What we found is that as we've been talking to our customers, it's clear that they would like us to do a lot more. For example, the chief digital officers that we talk to at media companies have been telling us that they want to understand which content was performing the best so that they could feature it more prominently and increase their ad revenue.

Comment from seks shop on 2010-08-22

2010-08-22T15:30:37Z

Advertisers and agencies were using Flash to produce rich ads but they were telling us that they really wanted to understand what the click-through rates of those ads were in real time, to be able to take more advantage of it.

Comment from Turkcell kontör on 2010-08-22

2010-08-22T15:29:06Z

I don't see quite see how Omniture compliments Adobe and their product portfolio. But maybe it's just Adobe trying to branch out into new businesses.

Comment from erotik shop on 2010-08-22

2010-08-22T15:27:30Z

First Macromedia now this....whats next Adobe? Google then the world?

Comment from Avea kontör on 2010-08-22

2010-08-22T09:54:58Z

I don't see quite see how Omniture compliments Adobe and their product portfolio. But maybe it's just Adobe trying to branch out into new businesses.

Comment from sex shop on 2010-08-22

2010-08-22T09:53:55Z

It's a fact that "Omniture has been loosing money again and again, they've spent a lot of money in sales and marketing." and Adobe can't deny with it. So if Adobe going to buying Omniture it would be a LOSS.

Comment from Vodafone kontör on 2010-08-22

2010-08-22T09:52:48Z

While it has an awesome product, Omniture is completely over-priced for what it actually delivers.

We switched from our $80k /yr Omniture contract to Google analytics earlier this year.

We have missed a few reports - specifically the customizable report builder tool - The other options are simply not enough to justify the gianormis cost difference.

I really do hope Adobe has something else up their sleeves with this.

Comment from sesli chat on 2010-05-17

2010-05-17T19:11:12Z

Comment from şişme bebek on 2010-04-30

2010-04-30T08:28:00Z

Comment from afrodizyak on 2010-04-30

2010-04-30T08:23:48Z

They already dominate the market in terms of web, graphic design etc through programmes such as Dreamweaver, Photoshop. I see the acquisition of Omniture as a sign that they will package analytics up into the likes of Dreamweaver

Comment from erotik shop on 2010-03-31

2010-03-31T13:54:47Z

I am not very convinced by the stream of revenue. Omniture has been loosing money again and again, they've spent a lot of money in sales and marketing.
Maybe Adobe is interested in the army of consultancy, and sales that omniture has.
They may also want to build a closer relation with their clients, being at the heart of their on-line business

Comment from vegetarian glucosamine on 2009-12-21

2009-12-22T06:10:43Z

I was surprised by the volume of people saying "huh? that doesn't make sense" the acquisition makes perfect sense to me.

Perhaps a free version similar to Google analytics or at least a lite version at low price.

Comment from Data Entry India on 2009-11-19

2009-11-19T13:18:08Z

Comment from MilindB on 2009-09-20

2009-09-20T15:31:41Z

The ability to measure the consmption of the content completes Adobe's Concept to Consumption workflow.
Probably thia s was one of the hindrance in the success of Adobe Media Player.

Comment from Bernard Lunn on 2009-09-19

2009-09-19T13:55:49Z

I think the basic premise of this post is correct. Adobe has to show SaaS style recurring revenue. That is what investors want and for very good reasons. The fact that Adobe revenues are declining puts a fire under them. I also think that the synergies are light. That is window dressing IMO.

But the SaaS model is a cash-burner not a cash-generator until you hit the right scale. Those who pointed out that Omniture was burning cash might be incorrect factually (as one can see from yahoo Finance quarterly cash flow report, that takes about 30 seconds). But even if burning cash, SaaS can be a really great biz when you tip over the scale where the operating leverage is great.

SaaS companies can sell for a premium and the old legacy model companies will have to pay that premium. Here in startup land we like that story!

Comment from rob on 2009-09-16

2009-09-17T00:51:43Z

Adobe MIGHT have a good reason for buying Omniture (although I'm not sure what it is. I'm pretty sure direct revenue isn't it.) Real, mature, publicly traded companies are judged on earnings, not revenue, so increasing revenue but lowering earnings by buying a money losing business is bad for a publicy traded company. Hence Adobe getting clobbered today- people have discounted Adobe's future earnings against the expected losses on the omniture side. And there will be losses, Omniture hasn't made money since 2003.

Comment from Brendan on 2009-09-16

2009-09-16T21:42:58Z

I don't see quite see how Omniture compliments Adobe and their product portfolio. But maybe it's just Adobe trying to branch out into new businesses.

Comment from Constant Gina on 2009-09-16

2009-09-16T21:20:24Z

First Macromedia now this....whats next Adobe? Google then the world?

Comment from Steven Walling on 2009-09-16

2009-09-16T20:31:26Z

Okay, so maybe cash cow was hyperbole. But I think my analysis still holds water. The fact remains that Adobe wouldn't be buying Omniture if it didn't have subscription revenue coming in.

Comment from Sunny on 2009-09-16

2009-09-16T20:27:14Z

Comment from Peter on 2009-09-16

2009-09-16T20:25:30Z

huh?

Comment from michael duley on 2009-09-16

2009-09-16T20:18:42Z

It's nothing short of brilliant. The one thing holding off major adoption of online content is the inability for advertisers to interactively get their products to market. Face it, online advertising is so last generation. Adobe has the opportunity to build an advertising platform capable of creating a standard for measuring the new media consumption. Once this "last mile" is complete the advertisers content will be more engaging and entertaining than the multi-media content we went online to view. Imagine watching Monday night Football online and being able to design you own sports gear, get seats to the next game, or attend the next personal appearance of your favorite Football quarterback all while watching the game. This is a win-win. It's coming and Adobe may be bringing it to a screen near you....:)

Comment from Troy Peterson on 2009-09-16

2009-09-16T19:20:08Z

I agree with... well "huh?" :)

While it has an awesome product, Omniture is completely over-priced for what it actually delivers.

We switched from our $80k /yr Omniture contract to Google analytics earlier this year.

We have missed a few reports - specifically the customizable report builder tool - The other options are simply not enough to justify the gianormis cost difference.

I really do hope Adobe has something else up their sleeves with this.

Comment from Huh? on 2009-09-16

2009-09-16T19:10:09Z

Cash cow? Omniture has a 5 year money-losing streak. They lost around $40,000,000 each of the past two years.