Adobe Fights Back

Google (Nasdaq: GOOG  ) and Microsoft (Nasdaq: MSFT  ) -- watch your backs. Adobe (Nasdaq: ADBE  ) wants a piece of the online word-processing market, too.

In one of many product announcements coming out of yesterday's Adobe MAX 2007 conference, the publishing-software giant disclosed its purchase of Virtual Ubiquity, the company behind Buzzword, a Web-based, document-scribing platform.

The allure of Internet-stored applications like Buzzword is that several users can collaborate on the same file online. Whether it's a college project, a volley of story ideas among screenwriters, or a way for editors to proof an article, there are clear benefits to working off a single document instead of having several copies floating about.

That's the mind-set that led Google to purchase Writely last year and make it the word-processing cornerstone of the Google Apps suite of programs, which achieve the same basic functionality of Microsoft's Office. Google acquired Writely just months after having agreed to promote Sun Microsystems' (Nasdaq: JAVA  ) StarOffice.

Microsoft didn't need the wakeup call. It has seen the success that Salesforce.com (NYSE: CRM  ) had in migrating conventional enterprise software license users to its cheaper, Web-based platform. In fact, Microsoft just announced a collaborative version of Office, although Office Live Workspace requires participants to have a registered, installed copy of Office software on their computers.

Cloud computing's silver lining
Ultimately, we're left with a crowded market of software and Internet companies that are trying to make inroads in a booming market -- a market some analysts refer to as "cloud computing."

Go ahead. Cue up the Rolling Stones, and picture Microsoft CEO Steve Ballmer working up a sweaty frenzy as he belts out, "Hey! You! Get offa my cloud!"

A lot is at stake here. Since Internet-stored applications require nearly infallible server uptime, the game is limited to deep-pocketed titans that can afford to handle the heaps of flowing data. The paid-search heavies, such as Google and Microsoft, relish keeping consumers close to their domains with their sticky apps in this realm.

Yet those limitations won't make the market any less competitive. Just as video game makers are starting to fall in love with the inventory-free joy of digital delivery, cloud computing's rising stars would love a piece of the action. There is also a bit of viral magic at work: If five people decide to collaborate on a research project, and four of the five agree that Buzzword is the platform of choice, the fifth person will have no choice but to convert.

Buzzword is still in invitation-only beta mode, although it's clearly positioned as a higher-end solution over rudimentary alternatives that simply cover the collaborative word-processor basics. Buzzword is based on Adobe technology, so you know that the desktop publishing giant that brought you Photoshop and Acrobat will get dolled up for the party.

Buzzword: More buzz than Word?
Google and Adobe? Butting heads? Maybe you missed the memo. After all, Google's YouTube is powered by Adobe's Flash technology. Adobe also has no bad blood with WordPerfect parent Corel (Nasdaq: CREL  ) .

So why does Adobe want a piece of the word-processing market, beyond the fact that it's there and a logical extension? Well, Microsoft has been taking swings at Adobe lately. Back in April, Microsoft rolled out Silverlight, a video format that competes with Flash. A few months earlier, Windows Vista came out with the XPS document platform that is seeking to supplant Adobe's PDF Acrobat files as the publisher file of choice.

Companies such as Google and Corel just happen to be in the way of a fight between Microsoft and Adobe. The twist is that Google and Corel are also locked in battles with Mr. Softy.

Can they all gang up on Microsoft, once and for all? Don't bet on it. Microsoft may seem like a lumbering, slumbering giant, but it's a lot smarter -- and far more awake -- than you think.


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