Adobe’s stock price shot up more than 11% Thursday after it was revealed that CEO Shantanu Narayen has held secret talks with Microsoft chief Steve Ballmer.
The two men reportedly met for more than an hour at the Adobe office in Silicon Valley to discuss how to combat Apple in the PC and mobile markets, and canvassed a possible acquisition of Adobe by the US software giant, the New York Times reports.
Both firms have ordered a wall of silence regarding the meeting, but Adobe PR chief Holly Campbell has been damned by association because she did not deny it had taken place, the Times said.
While Adobe and Microsoft have some competing software – notably Microsoft’s Flash-rivaling Silverlight media plug-in - the main thrust of the meeting was to discuss the growing threat of Apple.
The firm now looms as a bigger and more voracious competitor than either firm does to each other, particularly in the mobile space where Microsoft’s business has stalled.
Adobe has had a public spat with Apple chief Steve Jobs who refused to load Flash onto the iPhone, claiming it is unstable and consumes too much battery life.
Microsoft was reportedly interested in acquiring Adobe several years ago, but backed away because of anti-trust fears.
In today’s environment, where Microsoft is losing ground to Google and Apple, a deal would be much less likely to arouse opposition from competitors and regulators.