Adobe’s stock price shot up more than 11% Thursday after it was revealed that CEO Shantanu Narayen had 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.
But a possible acquisition by Microsoft of Adobe was also canvassed, the New York Times reported.
The Times said those involved in the meeting has been instructed to stay quiet about the meeting, although Adobe PR chief Holly Campbell did not deny it had taken place.
The two companies do have competing software, notably Microsoft’s media plug-in Silverlight, which is a direct rival to Adobe’s Flash.
However, Apple now looms as a bigger and more voracious competitor to the both of them, especially in mobile, a sector Apple dominates and where Microsoft is stalled, putting its hopes on yet another revamp of its OS.
Adobe has had a public spat with Apple chief Steve Jobs, who says Flash is unstable and consumes too much battery life. He has refused to load it onto the iPhone.
Reportedly Microsoft was interested in acquiring Adobe several years ago but did not move 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.
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