Adobe has announced that it has entered into a definitive agreement to acquire privately-held
Fotolia for approximately $800 million in cash. Fotolia will be integrated into
Adobe Creative Cloud, providing current and future Creative Cloud members with the ability to access and purchase over 34 million images and videos.
Currently, Adobe’s Creative Cloud has over 3.45 million members. The integration of the Fotolia service into the Cloud offering should significantly simplify and accelerate the design process for users.
Adobe says, “The acquisition of Fotolia cements Creative Cloud’s role as a vibrant marketplace for creatives to buy and sell assets and services as well as showcase their talent to a worldwide audience.” Adobe also plans to continue to operate Fotolia as a standalone stock service, accessible to anyone.
David Wadhwani, the senior vice president for Digital Media at Adobe said, “The acquisition of Fotolia will reinforce Creative Cloud’s role as the preeminent destination for creatives, Creative Cloud is becoming the go-to marketplace for the creative community to access images, videos, fonts and creative talent, through critical creative services like Fotolia and our new Creative Talent Search capabilities.”
In the last two years Adobe has been switching to web-based subscription for its Creative Suite 6 from traditional box licenses to attract more predictable recurring revenue. A Creative Cloud subscription currently costs $50, £47 or AU$50 per month for subscribers who sign up for a full year and want the full collection of Adobe software. The company also offers $20, £18 or AU$20 plans for individual titles; a $10, £9 or AU$10 plan for Photoshop and Lightroom; and a $70, £38 or AU$50 plan for business users who are part of a team. The subscription includes the software, some Adobe services for file sharing and publishing, and access to iOS and Android apps including Lightroom Mobile.
The company is also thinking about ways to connect Fotolia with Behance, (https://www.behance.net/) its portfolio site that gives subscribers new ways to monetize their work.
“Becoming part of the Adobe family is a dream come true for the Fotolia team and will accelerate our vision to become the best place for aftists to build a business and the ultimate destination for designers to find stunning creative work,” said Oleg Tscheltzoff, founder and CEO of Fotolia.
Fotolia was founded in 2004 and received its first growth investment from TA Associates in 2009. In 2012 Kohlberg Kravis Roberts & Co. in combination with TA Associates and a number of banks put together a
$150 million senior financing deal for the company in exchange for a controlling interest. In December 2013 Moody’s reported that Fotolia had 2012 revenue of $84 million and was seeking an additional
$300 million to refinance debt.
Many contributors have become increasingly dissatisfied with Fotolia, the functioning of its site, and lower than expected sales, although Fotolia still manages to find plenty of people who are willing to supply new images to the collection. Earlier this year contributors organized a
boycott in protest of Fotolia’s
Dollar Photo Club that was introduced in March.
This will be Adobe’s second effort to add stock photography to its offering. Back in 2005 the company introduced Adobe Stock Photos. In June of that year James Alexander, Director of Adobe Stock Photos, provided an outline of
Adobe’s vision for this service at the PACA annual conference. Adobe Stock Photos
ceased operation in 2008.
Adobe had $4.15 billion in revenue for FY14 and its shares were up nearly 8% in extended trading. For more on Adobe’s latest earnings call see
here.
The day after the announcement Shutterstock’s price dropped 13.3% to $61.90, near the 52 week low for the year. In the last 52 weeks Shutterstock’s price has been as high as $103.01.