What Does Neolane Acquisition Mean for Adobe?

Mergers and Acquisitions

Adobe Systems Inc. (NASDAQ:ADBE) has agreed to acquire privately held Neolane Inc., a French digital-marketing company, for $600 million in cash, Bloomberg reports. Adobe is the biggest maker of graphic-design software with popular products such as Photoshop, After Effects, and Dreamweaver.

Neolane will join up with Adobe’s Marketing Cloud product line to bolster Adobe’s visibility. The company makes tools that help marketers connect with consumers via the Internet, email, mobile devices, and direct mail by providing a platform to manage and automate marketing across the web. “Neolane brings critical cross-channel campaign management capabilities [to Adobe],” Brad Rencher, an Adobe senior vice president, said.

Rob Brosnan of Forbes says that one of the most interesting impacts of the deal could be disruptive pricing dynamics. “Because it now monetizes data and orchestration, it could afford to shift the marketing value chain in messaging away from the existing incumbents. By scaling Neolane’s existing email offering, effectively driving the price to a super low or free CPM, Adobe could dramatically reduce the number of email providers,” he says. Brosnan also believes the deal has strong implications for the future of acquisitions. “Expect Adobe’s move to initiate a new wave of consolidation and competition in the future,” he says.

The move follows similar pushes by Adobe’s competitors as companies look to add social media advertising to their marketing strategy. Salesforce.com Inc. (NYSE:CRM) agreed to buy ExactTarget Inc. (NYSE:ET) for $2.5 billion last month. Oracle Corp. (NASDAQ:ORCL) purchased Eloqua Inc. last year for $871 million while Teradata Corp. (NYSE:TDC) bought Aprimo Inc. in 2010 for $525 million.

According to Auriga Partners SA, the deal is an extremely positive move for the French company Neolane. Last year, the company saw its sales rise by 40 percent compared to 2011 while a quarter of its sales came from the U.S. The deal is expected to be closed in July.

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