Adobe Buys Omniture Inc. For $1.8 Billion

Adobe, which is best known for its Photoshop, Flash, and Acrobat software, is looking in an entirely new direction with its $1.8 billion acquisition of web analytics company Omniture . While Adobe's current software makes websites flashier and more dynamic, Omniture's software analyses how users interact with web pages, using that information to make the websites more effective.

Omniture's 5,100 clients, including AOL , Microsoft , eBay and Oracle, use the service to improve their results and return on investment. The likes of bank websites and online retailers use it to keep users clicking while content sites like AOL and Yahoo use it to make ads more effective.

You may never have heard of Omniture, but if you've spent any time online, you've certainly reaped the benefits of its ability to track and react to your online moves. Here's a link to my "Tech Effect" segment profiling Omniture on August 10, 2009. I had the opportunity for an extensive sit down interview with Josh James the CEO of Omniture at Fortune's Brainstorm conference in July.

Omniture helps companies personalize websites to customers' searches, helping prevent a drop off from some sites homepages that's as high as 40 percent. Omniture is also firmly on the social media bandwagon, extracting valuable data from all those Tweets and Facebook status updates. Its "SiteCatalyst" analytics product tracks brand mentions on Twitter, helping companies identify key fans and draw reactions from different users.

So what does Omniture mean for Adobe?

News of this acquisition comes as Adobe announces a 29 percent drop in quarterly profit and a 21 percent drop in revenue. But Omniture has also suffered through the downturn as customers have cut back on its services. One could easily argue that web anlaytics, making companies online investment pay off, is increasingly important, but will its business rebound out of the recession? How soon before it's additive to Adobe's results?

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The two types of software don't overlap, so there won't be any redundancies or cost savings. But Adobe says it plans to merge the two platforms, so consumers can both create content and measure traffic and users on the same system. Analysts response is mixed: there's no doubt that Omniture is a leader in a fast-growing field, but we'll see what kind of synergies Adobe can create to justify the 24 percent premium its paying for the company.

Questions? Comments?