18 April 2005 Adobe Systems, the developer of the ubiquitous Acrobat PDF document reader, has strengthened its grip on the Internet presentation market with a $3.4 billion deal for software maker Macromedia.

The all-stock deal is expected to close in the third quarter of 2005, and will expand Adobe’s reach in Internet presentation.

“Customers are calling for integrated software solutions that enable them to create, manage and deliver a wide range of compelling content and applications – from documents and images to audio and video,” said Bruce Chizen, Adobe’s CEO.

The acquisition may also help Adobe counter the growing threat to its business from Microsoft, which is thought to be considering including features that will facilitate document sharing in the next version of its Windows operating system.

Macromedia’s Flash technology is commonly used to display moving images and sounds within web pages and is installed in 98% of all Internet-enabled desktop PCs. It also produces DreamWeaver, a toolkit for developing Flash media.

Adobe has in recent years undergone a transformation, pushing into desktop publishing and intelligent document markets. This acquisition will help the company, which also makes the leading digital image manipulation tool Photoshop, extend its control of print media design tools to cover new media production and viewing applications as well.

“By combining our powerful development, authoring and collaboration software, Adobe has the opportunity to bring this vision to life with an industry-defining technology platform,” said Chizen.