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What: Shares of Adobe (Nasdaq: ADBE ) plunged by as much as 14% today before closing out the day with an 8% loss, after the company outlined business restructuring plans following the close yesterday.
So what: The software maker said that it is restructuring its business to align around growth areas in Digital Media and Digital Marketing. Adobe also provided fiscal 2012 revenue guidance that failed to impress investors, saying that the business changes will hurt growth by 4% to 5%. The restructuring will eliminate roughly 750 full-time positions, mostly located in North America and Europe, and Adobe will record between $87 million and $94 million in pre-tax restructuring charges.
Now what: In a move that would have made the late Steve Jobs proud, Adobe said it will stop making Flash for mobile devices in favor of HTML5, which has become the de facto standard in part because of Apple's (Nasdaq: AAPL ) high-profile embargo. Jobs had even published an open letter at the height of the drama early last year, with Google (Nasdaq: GOOG ) and Microsoft (Nasdaq: MSFT ) joining in on bashing Flash shortly after. The three powerhouses are heavy supporters of HTML5, so ditching Flash is the right call.
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