New Focus on Web Products Fuels Adobe Turnaround in Sales, Stocks

Article excerpt

A year ago, Adobe Systems, Inc. was almost down for the count. In fact, by the third quarter of 1998 the design software giant's stock had plummeted 50 percent.

To make matters worse, Quark Inc., a chief competitor, almost bought the company.

This monster of graphics enhancement software was adrift, but then the Internet exploded.

"If you looked at the Adobe of one and a half years ago, you did not see a company with the focus we have today," said Bryan Lamkin, vice president of marketing for Adobe's Professional Publishing Solutions arm.

For Adobe to survive, it had to take the strength of its professional publishing applications, which served the print and broadcast mediums for the last decade, and retool them to include the World Wide Web designer.

That change of focus, with an overall restructuring, had an immediate impact for the company, reflecting a six month, 11 percent increase (ending June 4 of this year) in sales resulting in revenues of $472.8 million. The company's stock price had also escalated from a 52-week low of $23.62 in September to $103.75 last week.

The 17-year-old, San Jose, Calif., company with 2,600 employees found in the Internet a new market that needed familiar design tools. Long known for its postscript print products and graphic design software such as Illustrator and PhotoShop, Adobe has put together an impressive lineup of software to usher in the new millennium.

The latest version of PhotoShop (5.5), for example, now includes image-editing solutions for Web use.

Key features offer advanced graphic capabilities such as the ability to create Web site animation and slice and merge images, as well as giving Web designers more palette and design tools.

PhotoShop may be synonymous with Adobe, but it is far from the only product the company has developed. Seemingly overnight, Web watchers have seen a proliferation of sites sporting the Adobe Acrobat logo.

Though not originally conceived as an application for the then nonexistent Web, Acrobat quickly gained acceptance by cyber-communities as the standard for downloading and printing documents in a Portable Document Format (PDF).

Adobe Acrobat ensures that documents are always produced in the exact format intended by the creator - eliminating the need for the user to re-author, or format, the document possibly changing its appearance or message. Such capabilities can be important in many instances, such when an advertising agency presents a finished ad to a client or when a sensitive government document must be reviewed in its original format to understand its full intent.

"We have about 10 years of development invested in Acrobat, and though it was quickly and widely accepted, it can not be seen as an overnight success," Mr. Lamkin said. "The development of Acrobat is an example of how we saw the need for a product to meet a specific customer need, in this instance one that would allow a document to be ubiquitously communicated."

Another key to to Acrobat's Web acceptance came as Adobe offered its plug-in reader-free from its Web site (www.adobe.com) - more than 100 million Internet surfers have taken advantage of this - but still managed to make money by charging for the document authoring software.

A final piece of Adobe's present-day success is GoLive 4.0, which is being heralded as the newest cutting-edge tool for professional Web site creation. The developer purchased GoLive from a Hamburg, Germany-based company in a transaction that included getting the creators as well as the product. …