Adobe Systems Inc said on Tuesday it would buy the Web analytic software company Omniture Inc for about $1.8 billion, giving the maker of content-creation software a way to let marketers measure the effectiveness of such content.
San Jose, California-based Adobe,which makes Flash, Acrobat and Photoshop software, said it would buy Omniture for $21.50 per share in cash, a premium of 24% over Omnitures closing stock price Tuesday.
The announcement came as Adobe said it earned $136 million, or 26 cents per share, in the fiscal third quarter that ended in August, down 29% from the same time a year earlier.
Excluding one-time items, Adobe earned 35 cents per share, a penny above what analysts polled by Thomson Reuters were expecting.
Revenue fell 21% to $697.5 million,inching past analyst expectations of $686.2 million.
The recession has slowed demand for Creative Suite 4, the most recent version of the software package that brings in the bulk of the companys revenue. But analysts say this will likely mean more pent-up demand for Creative Suite 5 when it launches.
For the fourth quarter, Adobe forecast earnings of 23 cents to 29 cents per share and adjusted earnings of 33 cents to 39 cents per share. The latter compares with analyst expectations of 37 cents per share.
Adobe expects sales of $690 million to $740 million for the quarter, bracketing Wall Streets estimates of $719.2 million.
Omniture, based in Orem, Utah, offers a variety of Web traffic analysis and other products for companies to improve their marketing over the Internet. Its customers include Apple Inc, Time Warner Inc and Walt Disney Co.
The acquisition would marry Omnitures services for figuring how to best deliver messages with Flash and other Adobe tools for creating websites and ads. Omniture services could then be used to monitor how effective the messages are.
Adobes Creative Suite products and Flash platform help customers create and deliver engaging experiences. The addition of Omnitures online marketing suite will help customers measure, analyse and optimise the impact and value of those experiences, said Adobe CEO Shantanu Narayen in a conference call.
Trip Chowdhry, an analyst with Global Equities Research, said the planned acquisition would allow Adobe to create new streams of revenue even as its existing businesses decline.
Though he called the deal very timely, Chowdhry believes Adobe is overpaying for Omniture, especially because that companys paid products have been losing market share to Googles analytics service, which is free.
He said $12 to $13 per share rather than $21.50 would have been a fair value for the company.
Adobe expects the Omniture deal to close by November. The company will operate separately under Adobe as a new business unit, with Omniture CEO Josh James working as senior vice president reporting to Narayen.
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