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Where Marketo Fits in Adobe’s Strategy

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Adobe inks largest acquisition deal ever

Adobe Systems (ADBE) is acquiring Marketo, a specialist in B2B (business-to-business) marketing technology. The deal, valued at $4.8 billion, is Adobe’s largest acquisition ever. The transaction is expected to close in the coming months. Adobe is banking on the acquisition of Marketo to strengthen its position as a leader in providing businesses with digital solutions for managing customer relationships and customer experience.

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Expanding business with telecom clients

The acquisition of Marketo would also set Adobe on the path to serve a broader set of customers. In a recent interview with the Wall Street Journal, Adobe CEO Shantanu Narayen said his plans for the company include expanding relationships with clients in the telecom and financial services industries. These companies tend to have both consumer and business-facing divisions. Take the case of the telecom industry. The arrival of 5G network technology may mean that operators do more business with enterprise customers. There are huge expectations for 5G technology like stimulating the uptake of autonomous driving, Internet of Things, and cloud computing. Verizon (VZ), for instance, is underway with a program to take 5G from home to the office.

Adobe’s deals

In recent years, Adobe has been busy buying strategic companies to strengthen its digital marketing business. Adobe acquired data-analytics firm Omniture for $1.8 billion in 2009, and a year later it acquired Day Software. It acquired TubeMogul for $540 million in 2016. TubeMogul helps brands plan their online and television marketing campaigns.

Adobe has made four acquisition deals so far in 2018, according to Crunchbase data. Microsoft (MSFT), Oracle (ORCL), and IBM (IBM) have inked 12, six, and two acquisition deals, respectively, so far in 2018.

Adobe’s revenue rose 24.4% year-over-year to $2.3 billion in its fiscal 2018 third quarter, which ended in August.

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