Adobe opens up tech warchest in fight with Microsoft

CHICAGO--Adobe Systems detailed a number of technology projects and products at its Max 2007 developer conference on Monday and gave glimpse of how it intends to make more money from online services.

During a morning keynote, Chief Software Architect Kevin Lynch announced the acquisition of the online word processor Buzzword and showed a number of applications from partners written to take advantage of AIR, the Adobe Runtime Environment. AIR, still in beta, is a download that enables Web applications to act like desktop applications.

The company also gave a few peeks other technologies aimed at developers and designers. Adobe's biggest audience is comprised of creative professionals and designers, but its popularity is expanding into mainstream developers for the Web. Meanwhile, Microsoft is trying to extend its strength with developer products while recruiting more designers and creative professionals as customers.

Executives showed off Flash Player 10, code-named Astro, which will have enhancements for 3D images, including the ability to display and manipulate images on three axes.

Flash Player 10 will have a new programming language, code-named Hydra, tuned specifically for letting outside developers create their own special effects for Flash images. Adobe engineers are also making text display better on the Flash Player.

During a press and analyst briefing after the keynote, Lynch detailed a number of other projects that the company plans to demonstrate on Tuesday.

Cocomo is a technology project for hosted collaboration services.

The company on Monday launched a beta test of a program called Share, which lets people share documents online. The service and others are set to complement Adobe Acrobat Connect, which lets people share screens over the Internet. Cocomo will comprise a series of hosted collaboration services such as online chatting.

"With Adobe Connect, people can share screens and have meetings. We're opening that up now as a platform for developers...who can create applications that Adobe will be hosting."

Adobe is already investing heavily in Web video, with plans to add support for H.264 high-definition video in Flash. The company is also eager to add voice communications to its platform.

Pacifica is the name of Adobe's voice over Internet Protocol, or VoIP, work, which Lynch is expected to demonstrate on Tuesday.

Thermo is a project aimed at improving the work flow that happens when developers and designers create applications. Thermo is a visual tool that will enable more people to create rich Internet applications, Lynch said.

More revenue from hosted services
During a question-and-answer session for press members and analysts, CEO Bruce Chizen and President and COO Shantanu Narayen said the company intends to garner more revenue from online services and advertising through revenue-sharing models.

For example, Adobe has signed on broadcasters, including CBS, PBS and Yahoo, to distribute their video programming through the Adobe Media Player.

These content producers can show advertising in a variety of ways through the Media Player. Adobe can share part of that revenue and offer them additional services, such as analytics on how people are viewing their content, Chizen said.

In the case of Photoshop Express, Adobe's online version of Photoshop, Chizen indicated that the company is likely to offer services directly from its Web site.

With its collaboration services for products like Buzzword, Adobe intends to offer free services to individuals and offer premium services such as document versioning and work flow, executives said.

"There are lots of different business models. A lot will depend on what the application is, who the consumer is, and whether they want or don't want advertising, in which case it will be subscription-based...We have a lot of experiments going on," Chizen said.