NYT: Adobe, Microsoft executives discussed sale of Adobe to Microsoft

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The chief executives of software makers Adobe Systems and Microsoft discussed the possibility of Microsoft acquiring Adobe to take on Apple in the mobile-phone market, according to a report by the New York Times.

Microsoft CEO Steve Ballmer and Adobe CEO Shantanu Narayen (pictured left) reportedly met in secret for more than an hour to discuss possible partnerships to compete with Apple, which has become one of the dominant forces in the mobile phone market, the New York Times said, based on reports from employees from both companies.

The deal, which could be worth around $15 billion based on Adobe’s current market cap, would make phones running the Windows Phone 7 operating system direct rivals to the iPhone if they heavily incorporate Adobe’s Flash technology. Apple has long resisted the idea of bringing Flash to the iPhone and its other devices running on the iPhone operating system.

Microsoft is already looking to take on Apple and the other smartphone giants with the release of Windows Phone 7, which has an interface designed specifically for everyday consumers. Windows Phone 7 runs primarily on Microsoft’s Silverlight architecture, a competitor for Adobe’s Flash technology.

Investors immediately jumped on board the rumor bandwagon, sending Adobe’s shares up 11.5 percent to $28.69 by the time regular trading ended. Microsoft’s shares edged up slightly, up 0.4 percent to $24.53.