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"The rumors are swirling today about a secret meeting between Microsoft CEO Steve Ballmer and Adobe CEO Shantanu Narayen.  While a meeting between the heads of two tech giants isn't uncommon, reports say that they discussed a possible Microsoft acquisition of Adobe.  \nThat is what we call a potential game changer.  The question is whether it changes the game in favor of Microsoft and Adobe, or whether it benefits their main rival, Apple.\nThe chatter stems from a report in The New York Times.  According to the publication, Ballmer arrived with a small entourage at Adobe's offices to discuss Apple and its increasing influence over the mobile market via the iPhone.\nMicrosoft, which has lost significant chunks of the mobile market in recent years, is trying to make a big comeback through Windows Phone 7.  Adobe on the other hand suddenly became mortal enemies with Apple after Apple banned Flash from the iPad.\nWhat's really got the markets stirring though is how the two companies might respond to the Apple threat: via acquisition.  According to the report, the possibility of Microsoft acquiring Adobe was discussed.  That little tidbit of information drove Adobe's stock price up 11.5% today.\nLet's be clear: today's rumors are just that.  The most likely outcome is that Microsoft and Adobe never pursue anything more than informal discussions.  However, if Microsoft did put down $15+ billion for Adobe, it would be a game changer, but not in the way they would hope.\nAdobe Doesn't Help Microsoft Fight Apple\nMicrosoft and Adobe are both software giants with a large array of products.  Adobe controls Photoshop, ColdFusion, PDF, Acrobat, Premiere Pro and Flash.  Microsoft's list of products are too numerous to mention, but it has plenty of products that could be bolstered by Adobe, including Expression Studio, Paint, Visual Studio, Windows Movie Maker and Silverlight.\nCould the two companies combine their different software lineups into a coherent lineup?  Probably (Adobe did a very good job integrating Flash after it acquired Macromedia), but it would take years of work before they got it right.  Combining Flash and Silverlight would prove especially difficult.\nWould that software lineup really help them fight off Apple, though?  We sincerely doubt it.  It's not like Microsoft's going to force Adobe to pull Photoshop from the Mac; that would just be bad business.  Microsoft couldn't pull Flash from Apple's iPad and iPhone because it isn't there to begin with.  Both the iPhone and the iPad have done quite well without Adobe's help.\nAn acquisition would just distract Microsoft from building a killer phone platform that can compete with the iPhone.  Photoshop alone would generate billions for Microsoft, but that wouldn't solve its most pressing problem: Google and Apple's rapidly rising influence. The synergies in a Microsoft-Adobe pairing are there, but it wouldn't help Microsoft at all in the mobile market.  If the company's goal is to really win back mobile, it will have to look elsewhere for ammunition."^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2010/10/07/microsoft-adobe-acquisition/>