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Adobe Takes On Software Giants With $4.7B Marketo Buy

Adobe has confirmed it will acquire marketing software company Marketo from Vista Equity Partners for $US4.75 billion in a move likely to have big implications for competitors HubSpot, Oracle, SAP and Salesforce.

California-based Marketo is used by several Australian retailers including Harvey Norman and Bing Lee. The software allows clients to build and run e-commerce stores, handle online purchases, and facilitate returns.

“Adding Marketo’s engagement platform to Adobe Experience Cloud will enable Adobe to offer an unrivalled set of solutions for delivering transformative customer experiences across industries and companies of all sizes,” Adobe said in a statement.

Both companies have many customers in common, Adobe CEO Shantanu Narayen said on a conference call with analysts following the announcement of the deal. “It was clear [that] joint customers were looking for this integration,” he said.

 

Marketo was founded in 2006, was publicly listed in 2013 and acquired by Vista for $US1.8 billion in 2016. Its customers include Canon, GE, Microsoft and Hyundai.

Analysts have said that it is in some ways an ideal fit for Adobe, whose software is used for marketing directly to consumers, while Marketo’s marketing tools are B2B oriented.

Chief Executive Steve Lucas, who is staying on and will lead the company inside Adobe’s Digital Experience group, said he was excited about the unification of Adobe and Marketo’s technology. “The combination of Marketo and Adobe’s Experience Cloud will form the definitive system of engagement for B2C and B2B enterprise marketers. The result will be an unprecedented level of marketing engagement, automation, and attribution power, all with a goal of delivering end-to-end, exceptional experiences for our customers, where and when they want them.”

Adobe shares have risen by 78 per cent in the past year. The majority of  revenue comes from its Digital Media business, which includes the Creative Cloud software. Marketing software is included in the Digital Experience business, which generated $614 million in revenue in the most recent quarter, with 21 per cent growth year over year.

 

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