Adobe Defends Its $20 Billion Deal for Figma (axios.com) 19
Adobe executives think there's a lot that critics of its $20 billion purchase of Figma are missing. From a report: In a meeting with Axios, Adobe general counsel Dana Rao defended the deal's price tag and highlighted why Adobe believes it needs Figma to help shape the design-software giant's broader future. Adobe XD just wasn't cutting it. It was a product designed for a single user sitting at a PC in a world that wants cloud-based tools for real-time multi-user collaboration. After seven years of investment, Adobe XD was bringing in just $15 million in annual recurring revenue on a standalone basis -- a minuscule fraction of Figma's $400 million annual recurring revenue. (That, in turn, is a minuscule fraction of Adobe's overall annual revenue of $17 billion.)
Adobe has essentially put XD on ice, assigning just 20 employees to the product in what it sees as "maintenance mode." Figma has more than 800 people. Adobe needs a rethink for the cloud era. Its current efforts have been about bringing its existing tools to the web. The Figma deal offers help with the longer-term challenge of "reimagining the whole thing," in Rao's words. Adobe Express is an early homegrown attempt, but Rao said Figma will help the company fully reinvent itself for the next era of design. Rao said over time Figma customers will benefit from Adobe's other resources, including its troves of fonts and stock imagery.
Adobe has essentially put XD on ice, assigning just 20 employees to the product in what it sees as "maintenance mode." Figma has more than 800 people. Adobe needs a rethink for the cloud era. Its current efforts have been about bringing its existing tools to the web. The Figma deal offers help with the longer-term challenge of "reimagining the whole thing," in Rao's words. Adobe Express is an early homegrown attempt, but Rao said Figma will help the company fully reinvent itself for the next era of design. Rao said over time Figma customers will benefit from Adobe's other resources, including its troves of fonts and stock imagery.
Price? (Score:2)
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Adobe's overall annual revenue of $17 billion
If a company that big can't figure things out, tough shit. Adobe's incompetence is their problem.
All corporate mergers and acquisitions reduce competition and in the long run harm consumers. None should be allowed when it involves a company as big as Adobe.
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Clearly you don't get paid millions a year to come to such brilliant decisions, you'd never understand it!
Rule of thumb (Score:2)
As a rule, a company that buys another company, always overpay. And it's a bad signal, it means that you are not capable of doing what the other company is doing, but trust that they will keep doing it when they are under your management.
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As a rule, a company that buys another company, always overpay. And it's a bad signal, it means that you are not capable of doing what the other company is doing, but trust that they will keep doing it when they are under your management.
Well, "overpay" is sort of relative. Of course you pay more than the company is currently worth. Otherwise, what's their incentive to accept the offer? It would also be a signal to your shareholders that you don't actually have much faith in the business, so they might vote to reject the merger.
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I can see say 15% higher, but not multiples.
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Another rule
When a company is acquired, it's never good news for the customers
These amounts are just crazy (Score:2)
And nowadays, double digit billion dollar acquisicions of relatively obcure tech companies barely make the news.
How can any of these number make any sense?
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Same way the stock market makes sense/cents.
No one gives a shit about sanity or common sense in finance if the right people are getting rich.
Adobe says we're missing something (Score:4)
No, it's quite clear you're just eliminating another competitor.
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No, it's quite clear you're just eliminating another competitor.
I experienced one of those. We were a very small startup and we were acquired by a very large company in the open source software business that already had a product that was substantially similar, if not indistinguishable from our own flagship product. The problem was that we were winning deals. Barring some extraordinary level of 24/7 support, we offered nearly everything the big guys did, and we were cheaper. The big guys knew it, and they knew that once a customer signed a deal with us, the big guys wer
Some data behind the decision: (Score:3, Informative)
Feds need to stop the buyout (Score:4, Insightful)
anti-trust lawsuit (Score:2)
One thing that Adobe can argue is that Figma is a relatively young company. So it proves that the barrier to entry is not high. However, the shareholders will then question the CEO, why buy and not develop?
may not bode well for Figma (Score:3)
Figma? (Score:2)
Maybe This Deal... (Score:2)