Mountain View, California-based Adobe Systems Inc says that beneath its reported fourth quarter net losses of $48.1m (CI No 2,575) there is a restructured company that is set to clean up in the document processing and electronic publishing markets. Adobe finally completed its share exchange acquisition of Seattle-based Aldus Corp in September after a two month delay, which while irritating, according to Adobe, did give the companies time to plan their integration, which makes Adobe the fourth largest personal computer software company with annual sales of more than $500m, and king of the castle in desktop publishing and electronic typefaces. Managing director of the UK division, Alasdair Boyle, a former Aldus man, said, In this case one plus one equals more than two. And added that the new Adobe was coming to the market with an extended and enhanced range of products. Merging the two companies included the layoff of 400 staff worldwide, the shift of the European office to Edinburgh, an Aldus site, from Amsterdam and the write off of capitalised software development, all of which cost $82.2m, a bit more than the two companies predicted it would: they had a top figure of $77m. Adobe, however, says the merger has been completed, there will be no further redundancies because of it and it stresses that if it not had to bear these costs, and a further $12.4m hit for research and development costs at LaserTools Corp which it acquired last year, net profit would have been $30.6m for quarter. Adobe is now organised into five divisions: applications software, systems products, high end pre-press products, consumer and type. The consumer division comes courtesy of Aldus’ consumer group that was based in San Diego and has now moved to the Mountain View headquarters. It has already shipped some products (CI No 2,567). Although it is not a huge money-spinner for Aldus, the company believed it was of great strategic importance, and the new company shares this belief. However, major investment and marketing efforts will be deveoted to the software and systems divisions. Among the software that the company will not be taking forward is Freehand, the product it licensed from Dallas, Texas-based font supplier Altsys Corp; it has returned all rights to the Texan, along with all localisation work it did on it. Nor will it proceed with Aldus’s image manipulation program, Photostyler: rather, the company will concentrate on PhotoShop, which last quarter contributed to a rise in product revenue of 16% to $124.5m. However, it cannot r eport the same push from Adobe Acrobat 2.0. It sees this as a result of market doubt about the new standard the program has set but Adobe believes that once businesses see the advantages of being able to transfer documents easily from system to system, sales will soar.
