Analysts react to Adobe's $1.8B Omniture purchase

Last night Adobe Systems [1] announced they would be buying web analytics firm, Omniture [2] for $1.8 billion, a hefty price for certain. But what does Adobe, which sells tools aimed at the designer market such as Dreamweaver, Flash and PhotoShop, hope to achieve by purchasing a high-end web analytics firm? On its face the purchase seems to me like an odd choice for Adobe, but analysts had mixed reactions to the deal.

Shantanu Narayen, president and chief executive officer of Adobe sees the purchase as a way to provide a complete package of services for designers and developers. "This is a game changer for both Adobe and our customers. We will enable advertisers, media companies and e-tailers to realize the full value of their digital assets."

However, analyst Tony Byrne [3] from CMS Watch [4], was as perplexed by the deal as I was. He thinks perhaps this purchase wasn't about analytics, but something else. Byrne wrote to me, "It makes little sense. Omniture is a high-end system with an impressive, but limited customer base. I think Adobe wanted [Ominture's] SaaS platform." It's an interesting theory, but others had different ideas.

Jeremiah Owyang [5], a partner Altimeter Group [6] (and until recently a Forrester analyst) posted on Twitter that he thinks the deal makes sense. "Give designers analytics so they can see what works--and adjust in near-real time." But I'm not so sure designers are looking at analytics. That's the purview of the Marketing Department and the people who are interested in this type of data, might not be the people designing the look and feel of the website.

Phil Kemelor, a contributing analyst at CMS Watch with expertise in web analytics wrote a long analysis [7] this morning. He believes that although Adobe plans to incorporate Ominture technology in the Creative Suite line [8] of products, he says that it could be more useful to Adobe's growing platform line including AIR [9] and the Flash Platform. He speculates that this could give them a leg up on the competition. He writes:

"Perhaps the purchase of Omniture and the potential for enabling analytics within the platforms creates a compelling selling point...and certainly helps the company compete against Microsoft Silverlight on the Rich Internet Application side, and Qualcomm, Sun and Apple on the mobile device side."

Alex Yoder, CEO at rival web analytics firm, Web Trends [10] also thinks analytics is a marketing responsibility, but he sees this deal as clear evidence that web analytics are core to a marketing department's ecosystem. He also believes we may see more consolidation in the analytics market moving forward. "We would be surprised if there was not a continued close look at further consolidation in the industry and would look to the large holding company agencies and database/data warehousing companies to drive that forward."

In many deals, especially one for this amount of money, the purpose is clear. As this sometimes conflicting analysis shows, that's not necessarily the case here. It is one of those rare cases where we will need to wait and see how Adobe plans to use Ominture's technology and how it will fit into Adobe's product ecosystem moving forward.

For more information:
- see the Omniture press release [11]

Related Articles:
Omniture releases tool for measuring reach of viral videos [12]
Adobe adds live Techcomm Suite demo [13]
New Adobe service simplifies browser compatibility [14]
Adobe releases Techcomm Suite 2 [15]