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Adobe to buy the creator of Buzzword

Virtual Ubiquity sale opens a business software front

Adobe photo-editing software has helped the company thrive; now it's targeting the market for business software. Adobe photo-editing software has helped the company thrive; now it's targeting the market for business software. (DOUGLAS C. PIZAC/ASSOCIATED PRESS/FILE 2007)

Adobe Systems Inc., a company best known for software used to edit photos and digital media, yesterday served notice that it plans to compete in the increasingly crowded business software field with the purchase of a Waltham firm that makes an online word processor.

The acquisition of Virtual Ubiquity, an 11-person company that created the Buzzword authoring and collaboration program, using Adobe development tools, is part of a larger Adobe push to roll out an integrated suite of productivity software for small and mid-size companies.

In the process, Adobe, based in San Jose, Calif., will become the latest challenger to Microsoft Corp.'s long-dominant Office desktop software. Google Inc. recently added a presentation software program to its Google Apps for the Enterprise, an Internet-based business product, while IBM Corp. unveiled its Lotus Symphony package of desktop software for spreadsheets, word processing, and presentations.

Erik Larson, Adobe's director of marketing and product management, said his company will offer the Buzzword word processor free along with an other new service called Share that will let business people work collaboratively on a range of documents. It will also market paid premium services to businesses, including Acrobat Connect for Web conferencing and Create PDFs Online for documents.

"We do plan to integrate our services together over time," Larson said yesterday. "And over time we'll create a family of services focused on collaborating on documents that matter." Larson declined to say when Adobe would introduce its suite.

Microsoft is countering its growing roster of business software rivals with its own Web-based "live" services, which seek to appeal to smaller businesses, individuals, and teams within larger organizations as well as the big enterprises that buy its proprietary Office suites. Yesterday, as part of that effort, the company unveiled Office Live Workspace to let users store, share, and comment on documents.

"The competition is good for customers," said Rajesh Jha, corporate vice president for Office Live at Microsoft headquarters in Redmond, Wash. "We want to give our customers more choices."

Adobe and Virtual Ubiquity did not disclose financial terms of their deal, which is expected to be completed later this fall. As part of the acquisition, the staff of Virtual Ubiquity will move from Waltham to an Adobe office in Newton that employs about 170 workers. Virtual Ubiquity's staff, which includes five veterans of Lotus Development Corp., will continue to work together at Adobe as a Buzzword team.

Shares of Adobe moved up 34 cents, or 0.78 percent, yesterday to $44. Microsoft shares climbed 31 cents, or 1.05 percent, to $29.77.

Rick Treitman, chief executive of Virtual Ubiquity, said the company was started in 2005 and raised its first and only venture round last year from a fund started by Adobe to invest in firms piggybacking on its Adobe Flash Player and Adobe Integrated Runtime software. Virtual Ubiquity's developers used those applications in creating Buzzword, which Treitman said offers a more accurate view of how documents will be printed than other Web-based word-processing applications.

One challenge for Adobe and other companies marketing online software is convincing businesses to store their documents on the Internet, rather than on desktop computers.

Treitman said Buzzword enables creators of text documents to specify which collaborators they'll allow to access them as coauthors, reviewers, and readers.

"We're asking people to trust their documents to us, and Adobe is a trusted brand name," Treitman said. "Adobe is a good home for Buzzword. It has a lot of technology we want to interface with."

Within the small-business markets, 10 to 15 percent of companies already are experimenting with Internet software programs like Google Apps, estimated Laura DiDio, research fellow for the Yankee Group, a technology research firm in Boston. Adobe is jockeying for a piece of that expanding market, she said.

Microsoft, meanwhile, has been challenging Adobe's stronghold by rolling out software products, like Silverlight, a rival to Adobe's Flash, geared to the swelling ranks of digital media developers.

"Clearly what is happening is everybody is looking into new territories to expand into," DiDio said.

"And as they do that, the technology vendors are bumping into each other."

Robert Weisman can be reached at weisman@globe.com.

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