This Acrobat Has Really Limbered Up

We've all heard about the Information Superhighway--you know, where information will flow freely across far-flung networks to create a nirvana of digitized magazines, newspapers, and TV shows. But the truth is, when it comes to distributing anything more complex than E-mail, most of the world still resorts to printing. The hangup: Every word processing or desktop-publishing program uses its own fonts, typefaces, and formats for graphics. That makes documents nicer to look at, but they can be viewed in all their splendor only on a computer using the same software that created them.

So, when Adobe Systems Inc. introduced its Acrobat program for exchanging electronic documents in June, 1993, industry watchers heralded the product as the breakthrough that could open the electronic floodgates. Acrobat could take any document created by any software program--including a four-color magazine page--and display it on any computer. The main Acrobat program would record a digital snapshot of the page in Adobe's Portable Document Format (PDF). Then, any computer equipped with a second Acrobat component, a "reader" program, could display the PDF image--just as it appeared on the machine that created it.

MARKETING MISSTEPS. By finally making paperless electronic publishing easy, Adobe had pulled off a technological coup. Some analysts predicted a billion-dollar business for Adobe within a few years. But marketing missteps and missing features capped sales at a paltry $2.5 million in 1993. "It was a new area for Adobe, and they tripped all over themselves," says Chris LeTocq, an analyst with market researcher Computer Intelligence InfoCorp.

Enter Acrobat 2.0. On Sept. 12, Adobe took the wraps off a revamped version of the product that addresses many of the initial shortcomings. For instance, Acrobat 1.0 allowed only limited searching. The 2.0 version includes a sophisticated "search engine" licensed from Verity Inc., which can sift through mounds of electronic documents, including charts, graphs, and captions, to zero in on specific information. And the new Acrobat has security features. Information publishers, for instance, can limit access to paying customers only.

But the bigger changes have to do with marketing. Adobe attempted to sell Acrobat as a "shrink-wrapped" package in stores. Now, the company will sell through systems integrators--experts such as Andersen Consulting that help publishers and corporations set up systems using Acrobat. The basic program starts at $195 and a version for professional publishers is $595.

Most important: This time, the reader program will be free. Publishers and on-line services can give it to customers, and Adobe is urging computer makers to bundle the reader with their PCs. The first to bite: Apple Computer Inc. "This should finally blow open the market," says William J. Caffery, a Gartner Group Inc. analyst.

It's potentially a vast market. Because electronic distribution is less expensive and more efficient than paper, professional publishers and corporations are taking a serious look. Carolyn Mattimore, a vice-president at First Call Corp., a supplier of research to brokerage firms, says Acrobat "allowed us to get research reports off the paper and out of the mail." Switching to electronic can mean getting information out faster and saving millions of dollars in printing and postage. "Information will start to migrate at a blinding rate off paper to electronic," predicts Adobe Chairman and CEO John E. Warnock. And as that happens, the market for electronic document-exchange software could soar to a half-billion dollars in just a few years, predicts Caffery.

Adobe isn't the only one eyeing this market. The company that sets the standard for electronic publishing stands to become a pivotal player when the Information Superhighway finally takes shape. A half-dozen small software companies, including Interleaf, Frame, Farralon Computing, and No Hands Software, have been selling document-exchange programs for a year or more. But now Adobe has more worrisome rivals. In July, networking giant Novell Inc. introduced Envoy, which it obtained with its acquisition of WordPerfect Corp. Novell plans to sell Envoy for $189 by itself and will bundle it with its new PerfectOffice suite. Lotus Development Corp. is also likely to jump into electronic document distribution.

LOOMING THREAT? Most ominous, there are rumblings of an Acrobat killer from Microsoft Corp. The software giant won't comment, but insiders say the company is working on an electronic document format and reader. If Microsoft includes a reader with future operating systems, it could dominate the market overnight.

The Microsoft threat may be years off, however. For now, Adobe has an edge: Hundreds of companies already use the PageMaker desktop-publishing package made by Aldus Corp., which Adobe acquired in a $450 million stock swap on Aug. 31. That produced a $520 million electronic publishing giant. Aldus' PageMaker and Adobe's PostScript "page description" software are widely used by publishers. That, says Adobe President Charles M. Geschke, makes Acrobat, which is Postscript-compatible, a natural choice for electronic delivery.

Adobe has already signed some big names for Acrobat 2.0, including The Associated Press, which will use it to download advertisements to member newspapers, and Equitable Life Insur-

ance Co., which will use the software to manage corporate documents. "We see an opportunity for us and our customers to move into the electronic age," says Geschke. If Acrobat has really learned its new tricks, that is.


-- Converts electronic documents to a common format so they can be viewed and exchanged by anyone with the Acrobat "viewer" software

-- Allows publishers to distribute information electronically while keeping the rich typefaces,

graphics, and formats of printed documents


-- Provides intelligent search and retrieval for sorting through volumes of electronic information

-- Adds security provisions

-- No charge for "viewer"