October 26, 2009
On October 23, 2009, Adobe Systems Incorporated (Nasdaq: ADBE) announced the successful completion of its tender offer for all outstanding shares of Omniture, Inc. (Nasdaq: OMTR) at a price of $21.50 per share in cash.
Adobe's acquisition of Omniture was completed in a transaction valued at approximately $1.8 billion on a fully diluted equity-value basis.
Strategy and business integration
What does Omniture do?
Omniture is the leader in web analytics. The Omniture® Online Marketing Suite is the leading solution to optimize ad spend and conversion. It includes a comprehensive portfolio of applications for visitor acquisition, conversion, online analytics, and multichannel analytics built on an open business analytics platform.
Why did Adobe acquire Omniture?
Adobe's mission is to revolutionize how the world engages with ideas and information. By combining our content creation tools and ubiquitous clients with Omniture's web analytics, measurement, and optimization technologies, Adobe will be well positioned to deliver solutions that can transform the future of engaging experiences and e-commerce across all digital content, platforms, and devices.
While we are creating significant customer value by "completing the loop" from content creation through optimization, we also expect to benefit Adobe's own business model, accelerating both revenue and earnings growth. This acquisition:
- Significantly expands Adobe's addressable market and growth potential in the global analytics and optimization markets, broadening solutions Adobe provides to the rapidly growing Internet advertising, e-commerce, and digital media markets
- Further expands Adobe's offering of mission-critical solutions to the enterprise. Adding Omniture's capabilities will further enhance Adobe's offerings and ability to appeal to audiences such as advertisers, publishers, retailers, online marketers, and chief marketing officers
- Further diversifies Adobe's business, adding a scalable Software as a Service (SaaS) platform that captures more than a trillion transactions per quarter, an expansive partner ecosystem, and a recurring revenue model
- Accelerates Omniture's ability to expand into new vertical markets and geographies: Adobe's brand strength and global scale will catalyze the entry of Omniture into geographies beyond its current strong footprint in North America, Northern Europe, and parts of Asia. In addition, we expect Omniture solutions can leverage Adobe's presence in the government market.
- Enables Adobe and Omniture to cross-sell solutions to the combined customer base, which includes media and entertainment, agency, retail, manufacturing, financial services, and several other industries
How will customers benefit from the acquisition?
As consumers continue to increase their time spent online, Adobe customers — such as content publishers, media companies, and enterprises — will continue to transition from traditional forms of media to the web. Pressure to measure, optimize, and ultimately monetize consumers' online experiences will mount. The combination of Adobe and Omniture will ease the transition to the web for our customers by "completing the loop" from content creation through optimization.
- Adobe® Creative Suite® software and the Adobe Flash® Platform help customers create and deliver rich Internet experiences, content, and applications.
- The addition of Omniture will help customers measure and optimize the value of those experiences, content, and applications.
As a result, our customers will deliver more engaging and relevant experiences, content and applications — ultimately realizing improved return on investment for their web and digital media investments.
How will Omniture be integrated into Adobe?
Omniture will operate as a new business unit within Adobe — the Omniture Business Unit — focused on delivering and advancing its SaaS platform and the Omniture Online Marketing Suite, a set of integrated business analytics applications for optimizing ad spend and conversion of visitors.
Adobe's other business units are:
- Creative Solutions Business Unit — provides solutions for customers ranging from creative professionals to high-end consumers, with leading brands such as Adobe Creative Suite, Adobe Photoshop® and Photoshop Elements, Adobe InDesign®, Adobe Illustrator®, Adobe Dreamweaver®, Adobe Flash Professional, Adobe Premiere® Pro, and Adobe After Effects® software as well as Photoshop.com and Scene7® hosted services.
- Business Productivity Business Unit — provides solutions for enterprises and governments with products such as Adobe LiveCycle® and Adobe Acrobat®, Acrobat Connect™ Pro, and Acrobat.com.
- Platform Business Unit — focuses on advancing the Adobe Flash Platform, which enables the development of products and solutions that dramatically improve how web developers and businesses engage with their customers. The Adobe Flash Platform includes client and developer technologies such as Adobe Flash Player, Adobe AIR®, Adobe Flex®, Adobe Flash Builder™, and Adobe ColdFusion®.
- Print and Classic Publishing Solutions Business Unit — provides products and services that address market opportunities ranging from the diverse needs of technical and business publishing to Adobe's type and OEM printing businesses.
Are there plans to discontinue any Omniture products?
There are no plans to discontinue support or development of any of Omniture's current products. To the contrary, Omniture will have access to greater resources to enhance the functionality of existing products as well as develop and acquire new technologies.
What are the key strategic integration points between Adobe and Omniture?
With the acquisition closed, Adobe will begin working on product integrations to deliver a complete, unmatched solution set for both the current and future web. These include:
- Integrating Omniture's analytics and optimization solutions with the Flash Platform to make engaging content and applications running in Flash Player and Adobe AIR highly measurable and easily optimized — and extending the Flex framework to include easy-to-use analytics components
- Building packaged integrations between Omniture solutions and Creative Suite tools — including Adobe Dreamweaver, Adobe Premiere Pro, and others — providing analytics about, and optimization of, the user experience and content for designers and developers
- Integrating Omniture video analytics and optimization capabilities with video compatible with the Flash Platform (currently used to deliver more than 75% of video on the web); also, continuing to invest in advancing this complete video capability based on emerging customer requirements to support better targeting, engagement, and monetization
- Integrating Omniture solutions to analyze and optimize experiences and content consumed across multiple screens, including smartphones, Internet-connected televisions, and other devices
- Building packaged integrations with other key Adobe solutions, such as LiveCycle and Scene7, where the inclusion of analysis and optimization capabilities will provide a more complete solution for the customer
What kinds of customer use cases will result from Adobe and Omniture product integrations?
- Designers and developers — will be able to build applications that incorporate measurement and optimization into the early stages of the creation process. This will enable greater progress toward user-centric application design and enable them to quickly refine applications to increase usage, satisfaction, and monetization.
- Publishers — will be able to measure content consumption, target, and optimize the experience on "owned and operated" properties, virally distributed and social media properties, and across all Internet-enabled devices. This ultimately will increase the value of their inventory.
- Advertisers — will be able to easily tag all formats of advertising as a native part of their creation workflow, allowing them to measure user engagement and performance across fragmented media types, online channels, and devices. This will help them provide a more relevant, personalized experience to increase visitor engagement and conversion.
- E-commerce and marketing professionals — will be able to easily tag product information and on-site promotional content as a native part of their creation process. These businesses will be able to optimize the delivery of landing pages, on-site promotions, product merchandising, product recommendations, and shopping cart funnels that are customized to a given segment of users, or even a single user, based on behavioral information and other information available to the site operator.
Apart from Adobe product integrations, what are the other Omniture product priorities?
- As the Omniture Online Marketing Suite already provides a best-in-class solution across all mainstream web standards and content formats, we will maintain an open platform with a rich set of APIs to easily integrate with customer and partner applications, as well as continue investments in the analysis and optimization of mainstream standards and formats, including HTML, SWF, FLV, and PDF.
- We will continue to invest in the development and integration of all current Omniture Online Marketing Suite applications, leveraging Adobe's expertise in suite development.
- We will make additional investments to build or acquire new online marketing applications that extend the value of the Omniture Online Marketing Suite to online marketers.
- We will also invest in the platform and SaaS infrastructure to meet customer requirements for reliability and scalability as Omniture customers' businesses grow.
Will the acquisition of Omniture and Omniture-related product integration affect the schedule for Creative Suite 5?
We do not anticipate any schedule delays for the next release of Creative Suite in 2010 due to the Omniture acquisition. We are excited about the possibilities of bringing additional values and capabilities to both product sets in the near- and long-term.
Regarding product release cycles overall, preliminary plans are in place for priority product integrations, but we are not currently releasing further details or timelines.
Who will lead the new Omniture Business Unit for Adobe?
Josh James, Omniture's former CEO, has joined Adobe as senior vice president and general manager of the new business unit, reporting to Adobe's president and CEO, Shantanu Narayen.
What will happen to the Omniture corporate brand?
Upon the close of the acquisition, Omniture will be referred to as Omniture, an Adobe company. This is a transitional brand strategy. We expect that as soon as practical the Omniture corporate brand will be retired and the company will fully align behind the Adobe corporate brand.
Over the next few months, we will be evaluating considerations for the optimal product naming structure for Omniture products.
Are other former Omniture executives joining Adobe?
Yes. Members of the Omniture executive team joining Adobe include:
- Chris Harrington — vice president and general manager, Omniture Sales and Services
- Brett Error — vice president and general manager, Product and Technology
- John Mellor — vice president, Business Development
Will Omniture have representation on Adobe's board of directors?
Was there a reduction in force as a result of the Omniture acquisition?
Yes, approximately 9 percent of Omniture positions are being eliminated.
What types of positions are being affected?
Most positions being eliminated are general and administrative functions.
Will there also be reductions among Adobe employees as a result of the acquisition?
As we begin to integrate Omniture into Adobe and finalize our FY 2010 operating plan, we will, as we do every year, review our overall resources and structure to ensure they align with our strategy and revenue projections going forward.
How many employees did Omniture have before the acquisition?
Approximately 1,200 worldwide.
How many employees does Adobe have worldwide now that the acquisition has closed?
Adobe reported 7,564 employees worldwide at the close of fiscal Q3 2009 (September 15, 2009). We will be providing an updated worldwide employee number when we report fiscal Q4 earnings on December 15, 2009.
Will Omniture's former headquarters facility in Orem, Utah, remain in operation?
Yes. Adobe's newly formed Omniture Business Unit will be based out of Omniture's former corporate headquarters facility in Orem.
Adobe and Omniture both have operations in several of the same cities and regions. Will there be facilities closures?
As we work through the integration process, we will evaluate where consolidating facilities may make sense, based on our hiring plans and the locations of our customers. As of today (October 26, 2009), there is nothing to announce.
Customer and partner support
Will existing Omniture customer support agreements continue to be honored?
Adobe intends to honor the terms and conditions of existing Omniture contracts for all current customers. At this time, there is no change in Omniture's support policy or agreed-upon service levels to customers as a result of this transaction. Technical support will continue to be governed by the terms of the Omniture service agreements until the current support term has expired. Any changes to support contracts as a result of Adobe's business policies will be communicated promptly to customers.
How will customers know if there is a change to their sales account team?
We are committed to a smooth transition for customers. Customers will be notified if there are any changes to their account teams. Currently, we don't anticipate significant changes.
Whom should Omniture customers call for product support?
Customers should continue using their existing channels.
Transaction and financial information
When did the acquisition close?
The transaction closed on October 23, 2009.
What were the terms of the acquisition?
Refer to the following Adobe/Omniture acquisition-related press releases:
- Adobe to acquire Omniture
- Adobe commences tender offer for Omniture
- Adobe successfully completes tender offer for Omniture Shares
What will happen to Omniture's common stock, which is traded on Nasdaq?
Omniture's common stock, formerly traded on the Nasdaq Global Select Market under ticker symbol OMTR, ceased trading in conjunction with the close of the acquisition.
When will Adobe provide financial targets for the combined company?
We are not providing additional or updated financial target information at this time. For Adobe's fourth quarter of fiscal year 2009, we intend to report the combined business of Adobe and Omniture in our earnings report on December 15, 2009. As part of the fourth quarter earnings report, we expect to break out financial information related to the standalone Omniture business for the short period of time it contributes to Adobe's fourth quarter results.
What is Adobe's fiscal reporting calendar?
Adobe's fiscal year 2009 closes on November 27, 2009.
This FAQ contains forward-looking statements, including those related to forward-looking product plans and integration, that involve risks and uncertainties that could cause actual results to differ materially. For a discussion of these and other risks and uncertainties, individuals should refer to Adobe's SEC filings. Adobe does not undertake an obligation to update forward-looking statements.