Altsys sued Aldus, contending the merger violated the noncompetition clause in Freehand's licensing contract because Adobe offers a competing program, Illustrator.
ALDUS PHOTOSTYLER FOR WINDOWS SOFTWARE
The deal was nearly derailed this summer by the Altsys Corporation, a Texas software company that developed the Freehand graphics illustration program - one of the few software products that Aldus sells that it did not develop in-house. Brainerd worked through the winter on the merger's terms before announcing their plan in March. Brainerd wants to form a foundation devoted to environmental protection. Having made his millions in software, Mr. Brainerd, Aldus's 46-year-old chairman, said he thought of the merger shortly after his announcement in August 1993 that he planned to resign. "Adobe, even with its different corporate culture, is at least compatible and sympathetic to Aldus." "From Aldus's standpoint, being acquired by Adobe is probably the best thing that could have happened," said Jonathan Seybold, who is the chairman of the firm Seybold Seminars and is considered the desktop publishing industry's most influential analyst. Yesterday, it closed down 37.5 cents, to $31.25. But as essentially a one-product company, Aldus still faces intense competition and pressure to diversify.Īldus's stock, languishing below $18 a recently as February, surged after the Adobe merger was announced on March 15, reaching a 52-week high of $34.25 two days later.
Sales of Aldus products have since improved, with net income in the first six months of 1994 at $7 million on revenues of $119.9 million, helped by a long-overdue overhaul of Pagemaker. From its all-time high of nearly $60 in the second quarter of 1991, Aldus's stock sank as low as $10.25 in the fourth quarter of 1992. Yet, when merger talks with Adobe began last fall, Aldus had already started to come out of a slump that saw profits fall from $23 million in 1991 to $6.8 million in 1992.
ALDUS PHOTOSTYLER FOR WINDOWS PROFESSIONAL
It has been squeezed in the professional market by Quark of Denver, and in the lower end of the market by word processing programs like Wordperfect and Microsoft Word, which offer basic desktop publishing capabilities.Įven in its best years, Aldus has frequently had problems shipping products on schedule. After enjoying years with virtually no competition for Pagemaker after its introduction in 1985, Aldus has more recently found its dominance in desktop publishing threatened. The merger comes none too soon for Aldus, based in Seattle, whose product line also includes graphics software for the publishing and the professional video markets, as well as a consumer program called Persuasion for creating business presentations. "Adobe is putting a lot of stake in it, and has made Acrobat the centerpiece of its plans for the future." "Anybody in their right mind is looking seriously at electronic publishing," said Jonathan Seybold. Moreover, most other software companies are also preparing themselves for the coming era of electronic distribution, meaning that Adobe will hardly have the field to itself. Likewise, Aldus's lead in document-creation has been seriously challenged the last few years by products like Quark Inc.'s Quark Xpress. Acrobat has met with only mixed success since it was introduced a little longer than a year ago, and the entire market has not developed as quickly as Adobe or its competitors had hoped. Newspapers and magazines, which are also venturing into the on-line world, might be other candidates for Adobe's products.Īdobe has already ventured into on-line distribution with software called Acrobat, which endeavors to solve the sticky problem of exchanging documents among incompatible computer systems, and Aldus is a leading supplier of the software used to create documents on screen.īut success for the merged companies is by no means certain. Warnock sees an era not too far off when distributing advertisements, sales brochures and other documents over the Internet or other computer networks becomes as routine a task for companies as mass-mailing corporate documents is today.
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