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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: Rumor has it Microsoft is trying to team up with Adobe to take down Apple's (Nasdaq: AAPL ) iPhone. Both companies have had their feuds with Apple, and Microsoft is reportedly trying to use Apple's resistance to Flash as the fuel for a takeover.
Now what: An Adobe buyout makes a lot of sense for Microsoft, which has been losing share to Apple in the PC market. Adobe's flagship Creative Suite is used primarily on Macs in the design business, and Microsoft may be able to steal some of this share. It would also give Microsoft software for use on upcoming Windows Phone 7-based mobile phones. This is great news for Adobe shareholders, and I think the stock moves higher as more rumors spread and a possible bidding war starts, a la 3Par.