Adobe Systems' (ADBE) fourth quarter earnings exceeded the Zacks Consensus Estimate on higher revenue. However, the subscription service will hurt Adobe's revenue growth in the short term...(read more)
Adobe Systems (NASDAQ: ADBE) is a graphics application and desktop publishing software company whose product portfolio includes several ubiquitous consumer technologies, including Flash for rich Internet applications and Acrobat for publishing documents. Adobe's strategy has been to gain nearly universal penetration by giving away software to consumers--to run Flash applications and read Acrobat documents, for example--while selling the software to enterprises, developers and other professionals who create content.
While the company has traditionally specialized in graphics and publishing offerings such as Photoshop, Adobe is particularly well-poised to take advantage of the growth of next-generation Internet applications. Its acquisition of Macromedia, which invented Flash, was particularly strategic in expanding into the web developer customer base. The company now bundles applications such as Illustrator, Photoshop and Flash in order to reach a broad array of creative professionals, "knowledge workers" (including programmers, researchers, systems analysts, and students), and enterprises. Internet advertising is an especially important industry, as it caters to professionals who design and create ads, as well as to websites that utilize its capabilities for "rich media" ads.