"Adobe's ambition in this acquisition looks like a bit of a Longhorn killer to me," Governor said.
Microsoft has been working on dynamic form technologies and a graphics system called Avalon as part of its upcoming operating system, Longhorn. By moving into these areas, Adobe may be trying to cut the software giant off at the pass, both analysts said.
"There is no doubt that this is a significant competitive threat to Microsoft and one of Adobe's goals is to predict future battles," Brazier said.
The combined company would be able to create a variety of rich media and Internet applications that use Flash, bumping into areas that Microsoft has shown interest in, said Ovum analyst Bola Rotibi.
"When you think of where Microsoft is headed with the future of its Media Player and Media Center PCs, this goes head-to-head," Rotibi said.
The difference, however, is that the Microsoft offerings are locked into one platform, whereas Adobe will be trying to get its products on multiple platforms, she added. The company is looking to deliver content and applications not just to desktops, but to cell phones and other devices.
But while Adobe and Macromedia have a lot of strengths and products between them, the question now is what the big strategy is, according to Rotibi.
"Integration of products is one thing, but creating a new lineup is something else," she said.
The deal, which has been approved by both boards of directors, will see Macromedia shareholders receive 0.69 shares of Adobe common stock for each Macromedia share they hold, Adobe said in a statement. Based on Friday's closing prices, this values each Macromedia share at $41.86, considerably above the market value of $33.45.
The top two executives at Adobe will retain their positions once the acquisition has been completed, which is expected in the second half of the year. Bruce Chizen will remain its chief executive officer and Shantanu Narayen will remain president and chief operating officer. Macromedia's president and chief executive officer, Stephen Elop, will become president of worldwide field operations at Adobe.
(Peter Sayer in Paris contributed to this story.)
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