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Sorry, Adobe: Mind If I Twist This Dagger?

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Google (Nasdaq: GOOG  ) just made the Web a little bit more open for everybody. Incidentally, it also sunk a dagger into the heart of Adobe Systems (Nasdaq: ADBE  ) , whether it meant to or not.

One of the few reasons why anybody should care about Adobe's Flash platform just evaporated into thin air. Running through the Flash environment, you can watch online videos in a variety of formats on almost any hardware platform, with the notable exception of Apple (Nasdaq: AAPL  ) iPhones, iPods, and iPads. That cross-standard support was a selling point for Flash that may have slowed the adoption of next-generation HTML5 technologies. But Google just erased a brewing format war that could have reminded you of HD DVD versus Blu-ray, eight-track tapes versus cassettes, and disco versus heavy metal. It could have been ugly.

The VP8 video format that Google acquired along with developer On2 Technologies in February has been released in the wild as the WebM format. It's a royalty-free and high-quality solution that will let any software developer record, edit, and show good-looking videos without paying exorbitant license fees. The middle ground between h.264 supporters (Apple, Microsoft (Nasdaq: MSFT  ) , and videophiles in general) and the opposed Ogg Theora camp (Firefox, Opera, and proponents of free software development) has suddenly been filled by a solution that appeals to both camps.

And so Adobe lost a selling point for Flash.

Sure, Flash will support WebM video, too. The format will undoubtedly gain popularity after Google implements it for the all-world YouTube video service. It would be insane for Adobe to leave an important new technology unsupported, especially because I don't see any downsides to getting it done. But that will only let the company keep up with the Joneses rather than gain any unique advantage.

Now Adobe is running out of weapons to defend Flash, such as Advanced Micro Devices (NYSE: AMD  ) and NVIDIA (Nasdaq: NVDA  ) accelerating Flash video processing by way of their graphics hardware. How long before they extend that courtesy to the leading Web browsers and their HTML5 functionality? There goes the last bastion of Flash strength.

So Flash seems destined for smaller jobs, like playing Bejeweled and Farmville games or displaying annoyingly rich ad banners. When all is said and done, content developers will have little reason to spend extra resources to include the Flash player in their pages, because HTML5 will do what Flash does just as well or maybe even better.

Fool contributor Anders Bylund owns shares in Google and AMD, but holds no other position in any of the companies discussed here. Microsoft is a Motley Fool Inside Value recommendation and Google is a Rule Breakers pick. Apple, Adobe Systems, and NVIDIA are Stock Advisor selections. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletters today, free for 30 days.You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.

Read/Post Comments (5) | Recommend This Article (9)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 20, 2010, at 4:16 PM, ericsoco wrote:

    flash is not just about web video. all its recent detractors love to ignore the other things that flash makes possible -- rich interactivity, experimental interfaces, multimedia experiences that tie into complex back-end structures. and it allows developers to create these things within a robust OOP language that is, generally, as pleasurable to write as java. it's not just videos, "annoyingly rich ad banners", and bejeweled.

    now, just because steve jobs said so, half the web has decided that the browser is no longer a place to try new things with user experiences. apparently any sort of new ground must be broken only in native code.

    html5, along with other server-side technologies, *may* offer alternatives at some point in the future, but they're currently way behind. it's healthy for adobe and flash to have competitors and alternatives, particularly for experiences that demand traditional interaction paradigms. but for the rest? why try to bury innovation?

  • Report this Comment On May 20, 2010, at 4:18 PM, ericsoco wrote:

    sorry, meant to write "along with other client-side technologies."

  • Report this Comment On May 21, 2010, at 7:05 AM, TheBlindCat wrote:

    I have seen some pretty impressive CSS3 hardware accelerated animations appearing of late. You have Canvas for the imperative crowd and SVG for the declarative types. I expect tool support/visual design tools will appear very quickly to fill the gap. The stampede of developers for iPhone/iPad shows that the market exists. Those developers that don't want to deal with AppStore restrictions will go the webapp route with the option to deploy as an app via phonegap.

  • Report this Comment On May 24, 2010, at 10:09 PM, videophool wrote:

    VP8 will not be royalty free for long. They have used a number of patented H264 techniques. Since Goggle is not indemnifying users of VP8, it is effectively dead, or soon will be. Why pay H264 royalties for an inferior video codec?.

  • Report this Comment On May 24, 2010, at 10:10 PM, videophool wrote:

    I should add that the success of HTML5 is not dependent on VP8.

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