Adobe Sacks Employees, Restructures to Focus on Digital Media and Marketing

Adobe (NASDAQ:ADBE) has had quite a few interesting announcements to make this week. It revealed that it was finally stopping new development on Flash Player for mobile devices, essentially pulling the plug on Flash for mobile after being in denial for years, finally proving Apple‘s (NASDAQ:AAPL) Steve Jobs right. It also reaffirmed its revenue guidance for Q4 2011, expecting around $1.075 to $1.125 billion in revenue, but lowered its GAAP earnings guidance slightly. It also stated that it was restructuring its business, and trying to focus on the digital media and digital marketing parts which have much higher growth potential than the others. As part of the restructuring, Adobe will be cut its workforce in Europe and North America by 750 positions. ^[1]

Following these two announcements and a broad market sell off following rumors of an Italian default, its stock tanked nearly 8%, but recovered marginally by the end of trading hours.

Check out our complete analysis for Adobe

Adobe Focuses on Digital Media and Marketing

Adobe’s CEO Shantanu Narayen said, “Our mission is to produce the world’s content and maximize the impact of that content. Adobe is doubling down in the digital media and digital marketing categories, markets rich with opportunities for innovation and growth.”

Adobe recently acquired Auditude, and is trying to go after the growing video analytics and advertising market. Adobe’s entire business is now centered on content – producing it using content authoring tools like Acrobat and Creative Suite, and marketing, measuring and monetizing it using analytics and advertising tools like Omniture and Auditude.

We have a $35 Trefis price estimate for Adobe, which stands more than 20% above its current market price.

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1. Adobe Restructures, Lays Off 750, eWeek [↩]