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Quark, Adobe merger questioned

Seybold conference panelists agree that Quark's proposed acquisition of its competitor would be bad for customers.

Should Quark and Adobe merge?

"No" was the unanimous answer at a panel held at the Seybold conference today that included both companies' customers as well as analysts.

Last week, Quark went public with its efforts to acquire publishing software competitor Adobe. Quark's bid raised questions in the industry about the seriousness of the offer, given Quark's smaller size. Its annual revenue is estimated at well below half that of Adobe.

Michael Cates, with Hallmark Cards' publishing technologies and one of both companies' larger customers, said a merger would be negative for customers.

Customers such as Hallmark would suffer from less competition in the publishing tools market, he added. Also, Quark's customer service ranks below that of Adobe, he alleged.

"We have to do work-arounds or go to a third-party software vendor to help us [when there are problems with Quark software]," Cates noted.

Hallmark has a license to serve about 450 computers with Adobe's Photoshop and 300 of those "seats" for Illustrator. The company has about 400 serial numbers for Quark XPress.

Eric Shropshire, a former Quark product manager, agreed such a merger would not be good for the industry. "What drives innovation is competition," he said.

When the panel moderator asked more than 100 attendees if they liked the idea of Quark acquiring Adobe, no one raised a hand. When the moderator asked if they favored an Adobe acquisition of its competitor, some hands were raised.

Shropshire added insight into the seriousness of the offer by Quark's two owners, Tim Gill and Fred Ebrahimi. Industry watchers questioned the proposal because no specific price was mentioned. "Fred is dead serious. He rarely bluffs," he declared.

He also discounted speculation that Quark's offer was prompted by concern over Adobe's development of a new page layout program code-named "K2," which some industry analysts speculate could grab market share from Quark XPress.

"Fred and Tim don't scare easily and they have enough money [to keep the business going] in case K2 blows them out of the water," Shropshire said.