Web tool firm bids for Macromedia

ADOBE Systems, the world's largest graphic-design software manufacturer, has made a shock all-paper $3.4bn (£1.8bn) swoop for multimedia firm Macromedia.

The move will give Adobe a huge shot in the arm as it looks to take a lead against Microsoft in the market for creating and distributing digital documents in the business world.

San Francisco-based Macromedia is best-known for animated graphics software such as Flash Player, which puts moving images and sound on internet pages.

Adobe chief executive Bruce Chizen said the acquisition would also reduce its reliance on Acrobat, a programme that allows computer users to read a host of financial documents and reports.

'The primary motivation for the two companies joining is to continue to expand and grow our business into new markets,' he said. Chizen remains chief executive. Macromedia president and chief executive Stephen Elop will become president of worldwide field operations.

Adobe, which also said second-quarter profits should be at the top end of analysts' forecasts, is giving Macromedia investors 0.69 of an Adobe share for each Macromedia share they hold.

Microsoft and Adobe are making strides in the market for intelligent software, which can send documents to contacts within a business automatically. Cliff Saran, technical editor at ComputerWeekly, said: 'I think we'll see some very compelling technology.'