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Macromedia

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Macromedia, Inc.
Company typePublic
IndustrySoftware, Multimedia, Web development
PredecessorAuthorware Inc., MacroMind–Paracomp
FoundedApril 1992; 34 years ago (1992-04)
FounderBud Colligan, Tim Mott
DefunctDecember 3, 2005 (2005-12-03)
FateAcquired by Adobe Systems
SuccessorAdobe Systems
Headquarters
San Francisco, California
,
United States
Area served
Worldwide
Key people
Bud Colligan (co-founder, CEO until 1997), Tim Mott (co-founder, chairman and CEO), Robert K. Burgess (president 1996, CEO 1997–2005), Stephen Elop (COO 2004, CEO 2005)
ProductsFlash, Dreamweaver, Director, FreeHand, ColdFusion, JRun, HomeSite, Breeze (Adobe Connect), RoboHelp (Adobe RoboHelp)
ParentAdobe Systems (from 2005)

Macromedia, Inc. was a U.S.-based company specializing in graphics, multimedia, and web development software, headquartered in San Francisco, California. It gained recognition for flagship products like Flash and Dreamweaver. On December 3, 2005, it was acquired by its competitor, Adobe Systems.

History

Formed in April 1992, Macromedia resulted from the merger between Authorware Inc., creators of Authorware, and MacroMind–Paracomp, the developers behind MacroMind Director. At the time, the multimedia software market was valued at $200 million, with the merged entity controlling one-fifth of that sector. Leadership roles were assigned with Tim Mott from MacroMind serving as chairman and CEO, while Bud Colligan from Authorware took on the role of president and CEO.

Macromedia’s premier product was Director, an interactive multimedia-authoring application designed for presentations, animations, CD-ROMs, and kiosk interfaces. This tool was utilized by clients including American Airlines, AT&T, and Kellogg's, as well as in Hollywood productions such as Jurassic Park and The Firm. Meanwhile, Authorware played a significant role in the interactive education market.

By 1993, Macromedia had become the leading provider of multimedia development solutions. The rising popularity of CD-ROM players and multimedia content contributed to the company generating around $30 million in revenue during 1992.

With the commercialization of the Internet, Macromedia shifted its focus to web-enabled tools and introduced new offerings. In 1995, it launched the Shockwave Player plugin for Netscape Navigator at no cost, facilitating interactive content on websites. That same year, Macromedia expanded its web capabilities by licensing Sun’s Java Programming Language.

Acquisition of FreeHand

In January 1995, Macromedia acquired Altsys Corporation, known for developing the vector graphics application FreeHand and the font editing software Fontographer. Previously, Adobe Systems had purchased Aldus Corporation, which owned marketing rights to FreeHand. However, due to overlaps with Adobe Illustrator, the Federal Trade Commission mandated that FreeHand be divested back to Altsys in 1994. Subsequently, Altsys sold itself to Macromedia.

This acquisition broadened Macromedia’s suite of multimedia graphics software by adding illustration and design tools. The vector graphics technology from FreeHand also influenced the creation of Fireworks.

Although initially successful, Macromedia’s stock price reached a high of $63.75 per share in December 1995 before declining to $7.13 by 1997. In 1996, Rob Burgess assumed the presidency and implemented a strategy that included reducing staff by 10%, discontinuing several products, and concentrating efforts on web development.

Dreamweaver

In March 1996, Macromedia purchased iBand Inc., creators of Backstage web development tools, for $32 million. Building upon Backstage’s codebase, Macromedia introduced Dreamweaver in December 1997.

Dreamweaver was designed for professional web developers who preferred coding manually; it featured "Roundtrip HTML," which maintained hand-edited source code during visual editing and allowed users to switch effortlessly between code and design interfaces.

Over subsequent years, Dreamweaver gained traction among professional developers despite many still favoring manual coding techniques. By October 1999, about two-thirds (66%) of professional web developers used Dreamweaver while amateur and business users often chose competing products like Microsoft FrontPage.

Flash

In January 1997, Macromedia took over FutureWave Software, the developers behind FutureSplash Animator. Originally created for pen-operated devices, FutureSplash Animator featured a compact viewer tailored for slow internet connections. Macromedia rebranded this technology as Macromedia Flash and offered the Flash Player as a complimentary browser plugin, accelerating its adoption across the market.

By April 1998, Macromedia published the technical details of the Flash format, allowing third-party software to access and modify its files. Following founder Bud Colligan’s resignation in July 1998, Burgess assumed the CEO position and brought company stability by the end of that year.

To reinforce its dominance in interactive web development, Flash Player 6.0 was introduced in March 2002, featuring improved audio, video capabilities, and user interface enhancements. That June, Macromedia also bundled several internet applications.

By 2005, Flash Player had become the most widely installed web media format worldwide, surpassing competitors such as Java, QuickTime, RealNetworks, and Windows Media Player. As Flash advanced, Macromedia transitioned its focus from a graphic design tool to a comprehensive Web application platform by incorporating scripting languages and data connectivity while preserving a lightweight footprint.

Other acquisitions

In July 1999, Macromedia expanded its portfolio by acquiring Elemental Software, obtaining Drumbeat 2000 and eStore Builder products. Later that year in December, the company purchased Andromedia—a web monitoring and personalization firm—for $245 million to strengthen its e-commerce capabilities. Additionally, Macromedia established partnerships with web consultancy USWeb/CKS and e-commerce platform creator Broadvision.

The 2001 acquisition of Allaire Corporation brought essential web development tools into Macromedia’s lineup, including ColdFusion, a CFML-based web application server; JRun, a Java EE application server; and HomeSite, an HTML editor packaged with Dreamweaver. By 2002, Macromedia offered more than 20 products and maintained offices in 30 locations across 13 countries.

In 2003, Macromedia acquired Presedia, a company specializing in web conferencing solutions, which led to the expansion of its Flash-powered collaboration suite under the name Breeze. Later that year, it purchased help authoring software company eHelp Corporation, known for products such as RoboHelp and RoboDemo (currently marketed as Adobe Captivate).

Lawsuits

On August 22, 1997, Macromedia was subjected to a class-action lawsuit in California alleging that it misled shareholders regarding product performance and financial status. A similar legal complaint had been filed a month prior. The federal court dismissed this class-action on May 19, 1998.

On August 10, 2000, Adobe accused Macromedia of infringing two patents related to tabbed palette technology. In response, Macromedia filed counterclaims against Adobe for patent violations concerning a draw-based web page editor and a hierarchical website editor. The companies resolved all patent disputes through settlement in July 2002.

Purchase by Adobe

Adobe Systems announced on April 18, 2005, its intention to acquire Macromedia in a stock exchange deal valued at roughly $3.4 billion based on trading prices before the announcement. The transaction was finalized on December 3, 2005, after which Adobe merged Macromedia’s operations, infrastructure, and customer support services into its own organization.

Shockwave.com

In February 1998, Macromedia collaborated with MTV to unveil the ShockRave website, which featured interactive music videos, puzzles, games, and animated cartoons. By May 1999, Macromedia launched Shockwave.com as a platform to demonstrate Flash and Shockwave technologies. The website provided a variety of content including music, comics, games, downloadable offline material, and a premium subscription service named Shockmachine. Creators of South Park, Trey Parker and Matt Stone, produced an exclusive animated series for the site in exchange for equity stakes.

By December 1999, Shockwave.com had raised $44 million in capital from Sequoia Capital to support its user base of six million. At that point, approximately 100 million users had installed the company's Shockwave and Flash players. In October 1999, Macromedia announced intentions to spin off Shockwave as a standalone company, with CEO Rob Burgess initially managing both organizations. Macromedia maintained majority ownership until December 2000 when Shockwave.com merged with AtomFilms.

Leadership

  • 1992: Bud Colligan co-established Macromedia and served as CEO until 1997; he also chaired the board from 1992 through 1998.
  • 1994: James Von Ehr, previously CEO at Altsys Corp, joined Macromedia as vice president and remained until 1997.
  • 1996: Robert K. Burgess was appointed president and ascended to CEO in 1997, simultaneously holding the CEO and board chairman positions until Adobe’s acquisition in 2005.
  • 1997: Betsey Nelson took on the role of CFO and continued through the Adobe takeover.
  • 2004: Stephen Elop was hired as COO and assumed the CEO position in early 2005.
  • 2005: Shortly following Elop’s promotion to CEO, Macromedia announced its acquisition by Adobe.

Under Adobe

Retired products

See also


External links

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