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Microsoft, Adobe Competition Heats Up

(Seattle) It has not escaped Microsoft's attention that some of the coolest sites on the Web -- YouTube and MySpace included -- get much of their flash from Flash and other design programs sold by Adobe Systems Inc.

But as Microsoft Corp. gets ready to ship its own line of tools for designers and Web developers, the world's largest software maker finds it must also defend against Adobe on its home turf, the desktop. At the same time, the line between Internet and desktop programs is blurring -- and both companies see an opportunity to capture new business.

Microsoft Corp. is preparing to launch Expression Studio, a suite of design software that will go head-to-head with Adobe's flagship tools, Photoshop and Illustrator. It also will include a tool for building multimedia programs to bring it in line with Adobe's Flash. At $599 for the suite, Expression is a steal compared with the $1,000 or more Adobe charges for its Web developer suites.

Expression Web, a Web authoring tool to compete with Adobe's Dreamweaver, is already on the market. On Monday, the company said its Flash-like browser plug-in, Silverlight, will be released in beta at the end of the month. Both programs enable multimedia presentations that work regardless of the viewer's Web browser or operating system.

Adobe, meanwhile, started shipping Monday its Creative Suite 3, an upgrade to Photoshop and other core programs. Adobe touted smoother integration with Flash and Dreamweaver, which the company acquired when it bought Macromedia Inc. nearly two years ago.

This is just the latest clash between the two as Microsoft, dominant in operating system and desktop software, sizes up the smaller, Web-savvy Adobe. The software companies also are battling over standards for the paperless office and tools for displaying content on and building applications for mobile phones and handheld computers.

Microsoft, whose core loyalists are the millions of developers who build desktop programs, has little history with professional designers. While its amateur Web authoring tool, FrontPage, racked up more sales at retail than competing products in 2006, Web professionals have been complaining since the mid-1990s the code it generates doesn't work well with non-Microsoft Web browsers.

This time around, Microsoft said Expression Web will generate HTML and other code that complies with industry standards. It's also discontinued FrontPage.

Forest Key, the creative-sector veteran Microsoft hired to lead the Expression Studio charge, acknowledged that the company is reaching well beyond its traditional base, but said the company needs designers in order to stay competitive as software evolves.

"The state of user experience is just dramatically shifting," said Key, who came to Microsoft from Macromedia.

Microsoft's Expression tools will also let graphic designers try their hand at creating desktop software. In the past, designers worked in Photoshop, then handed a static picture off to programmers, who often had a hard time translating it into a working Web site or application. Expression's programs let designers draw and manipulate images using a familiar interface, but behind the scenes the tools also generate code programmers can work with.

"Making Windows applications previously was like this black art," said Lee Brimelow, a senior design technologist at Frog Design who has been working with Microsoft's new tools to design Yahoo Inc.'s instant messaging client for Windows Vista. Now, you "don't have to be a Microsoft programming geek to do it."

Microsoft also is eyeing a new breed of applications that combine the power of desktop programs with Web-style multimedia, design and data from various sources. The software maker recently showed off the TimesReader, a hybrid version of The New York Times' Web site built with Expression tools, that lets users download the news, then click around a Web-like interface even when offline.

Microsoft points out that its hybrid applications can take advantage of a local PC's graphics card to create intricate 3-D interfaces, for instance, that would be impossible with older Web tools.

Adobe isn't sitting idle.

Apollo, as Adobe calls the early version of its hybrid technology, lets Web developers and designers wrap up all the pieces of a sophisticated Web site -- HTML and Ajax coding, Flash videos and animation, and even PDFs -- and turn them into a program that can run on the desktop even if the computer is offline.

On Monday, Adobe announced one of its first Apollo-based programs, a media player that plays Flash video from the desktop. An eBay Inc. hybrid application is also in the works.

"We've been working with the designer space for, gosh, how many years? Upwards of 15? We really understand how designers do what they do," said Michele Turner, vice president of Adobe's platform business unit. "And they understand how to use our tools."

While Microsoft's hybrid applications can only be built on a Windows computer, and will only run on a Windows computer, programs built on Apollo work on any operating system.

Analysts watching the clash say the success of either company's bid could come down to which platform designers and Web developers choose to build out the next wave of desktop programs.

"The one with more applications will be the winner," said Trip Chowdhry, an analyst at Global Equities Research.

If the most interesting programs are built using Flash, people may see less of a need to buy a Windows PC next time they upgrade their computers, some analysts said.

For Microsoft, the notion that Adobe could take a bite out of Windows' 96 percent share of operating systems worldwide may not be an immediate threat, but that doesn't mean the company will let it slide.

"Microsoft can afford to think in a 10-year timeframe," said Rob Helm, research director at Directions on Microsoft, an independent research group. "When you've got a business like Windows that has 80 percent margins and 90-plus percent market share, even a 10-year threat to shave 10 percent off the business is enough to do something about now."

In the end, this round may come down to whether designers and Web developers will invest the time it takes to learn Microsoft's tools and put up with an end product that only works on Windows.

Greg Storey, a Web designer and developer in Orange County, Calif., is a longtime Mac and Adobe user. He complained that Adobe has added so many features that its software is starting to feel bloated -- a critique often leveled at Microsoft programs -- but that doesn't mean he's going to stop using it.

"To me, it's the difference between driving a Mercedes and driving a Ford, and Windows is definitely the Ford," he said.

Also, he isn't interested in limiting his audience.

"Even though the Mac users and Linux users might be a small percentage, they're a percentage nonetheless," Storey said. "I would much rather make it so that more people can see my work than fewer people can see it."

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