Adobe Systems Inc. (ADBE - Analyst Report) recently announced its decision to acquire digital-marketing company Neolane Inc. for $600 million in cash.
Paris-based Neolane Inc. is a privately-held company founded in 2001. It develops marketing automation and cross-channel campaign management software and services for B2B and B2C marketers. It also allows its customers to undertake personalized campaigns through direct mail, e-mail, SMS, MMS and other modes of communication. Some of the company’s customers include Accor Hotels, Alcatel-Lucent, AXA, barnesandnoble.com, Debenhams, Dior and EF Educational Tours.
The Neolane deal represents another step by Adobe to boost its Marketing Cloud offerings. The acquisition of Neolane will enable Adobe to utilize a number of social media-tracking and analysis tools for handling leads, marketing resource management, high-volume email marketing campaigns and a real-time offer recommendation engine for personalized as well as one-to-one messages. After the closure of the deal, Neolane will become a part of Adobe’s Marketing Cloud product line.
We remain highly optimistic about Adobe’s strategic acquisitions and continued innovation, which have given it a strong market position. Prior to the acquisition of Neolane, Adobe acquired Efficient Frontier to enhance its Adobe Marketing Cloud by adding optimization capabilities for search and display advertising and accelerating its entry into social advertising.
Adobe’s total revenue in the second quarter of fiscal 2013 was $1.011 billion, up 0.3% sequentially but down 10.1% year over year. Reported revenues were within management’s guided range of $975.0 million to $1.025 billion. The sequential increase was attributable to increased adoption of Adobe’s Creative Cloud.
Currently, Adobe has a Zacks Rank #3 (Hold). Other stocks in the sector that have been performing well and are worth a look include Aspen Tech Inc. (AZPN - Snapshot Report), SAP AG (SAP - Analyst Report) and Pegasystems Inc. (PEGA - Snapshot Report), all carrying a Zacks Rank #1 (Strong Buy).