Microsoft and Adobe keep quiet over rumoured merger

Both Microsoft and Adobe have kept tight-lipped about any possible merger between the two software giants.

The rumour mill went into overdrive after a report from the New York Times suggested Microsoft chief executive (CEO) Steve Ballmer and his Adobe counterpart Shantanu Narayen held a secret meeting.

During the talks, Ballmer and Narayen were believed to have discussed taking on Apple, in particular in the smartphone market.

One option vocalised was a possible Microsoft acquisition of Adobe, it was reported.

"Adobe and Microsoft share millions of customers around the world and the CEOs of the two companies do meet from time to time," a statement from Adobe read.

"However, we do not publicly comment on the timing or topics of their private meetings."

At the time of publication Microsoft had not responded to a request for any information on a possible Adobe acquisition.

Ballmer is currently on a European tour and he has already given a lecture in London to extol the virtues of cloud computing.

He also reportedly kept tight-lipped over any merger or plans to take on Apple as part of an initiative with Adobe.

Earlier this year a feud between Adobe and Apple broke out after the latter effectively banned Flash from its products.

The squabbling appeared to have come to an end when Steve Jobs' company took down the barriers preventing Flash from running on devices such as the iPhone.

Microsoft, of course, competes with Apple in various markets, from operating systems to mobile technologies.

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Richard Edwards, Ovum principal analyst, said a merger between Microsoft and Adobe would be driven by the need to make a splash in the mobile sector.

"The mobile apps business is now the place to be for software development companies, and Microsoft and Adobe have yet to make any real or significant impact in this market," Edwards said.

"If the two companies were to merge then it would have to be the mobile apps market driving the deal, as this is where both companies need to score big time."

An acquisition would strengthen Microsoft's standing in the "prosumer" market and enterprises would benefit if Adobe LiveCycle - the company's back-end business integration platform - was fully integrated with Microsoft SharePoint, he added.