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A sample context for Global Outlook reflection

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A sample context for Global Outlook reflection

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Adobe Inc., the low-key maker of digital tools to create PDFs and edit photos, pleased investors by reinventing itself as a subscription-software business. Its latest effort to keep pace with the times isn't landing so well.

Adobe this past week unveiled its largest-ever acquisition, agreeing to buy Figma, a little-known software startup that specializes in helping digital creators collaborate. The $20 billion deal price spooked investors and raised questions among analysts about the health of Adobe's business.

Tools to edit and manipulate photos and videos are in hot demand, with people creating visual content like never before. Since the onset of the pandemic, designers increasingly are collaborating remotely, relying on digital tools to make that happen. That has fueled demand for new applications, giving rise to startups such as Figma and Australia-based Canva.

Adobe, the biggest competitor in the design software market by sales, has struggled to tap into that enthusiasm and is starting to feel the impact. The company on Thursday announced quarterly results that showed a continued deceleration of revenue growth and issued guidance that came in below Wall Street's expectations. New annual subscriptions sales connected to the Creative Cloud service that includes functions such as its well-known Photoshop suite was slightly shy of the company's earlier projection.

Adobe products such as Photoshop and Illustrator are almost essential tools for people who design marketing materials and magazines. But some users have complained on social media and elsewhere that the products are difficult to use and lack the collaboration features available with Figma and elsewhere.

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"Figma is fast, small and lean," said Daniel Vinci, who runs an independent firm that designs websites, saying he and his clients embraced the startup's tools for the ease of working together collectively on digital projects. "Anybody can pick it up and start working. No Adobe product works like that," he said.

Adobe said it constantly modernizes its products and has introduced collaboration features in recent years.

Figma's appeal for users like Mr. Vinci helps explain why Adobe was willing to pay 50 times the smaller company's expected annual recurring revenue for 2022, and twice the valuation it received in a funding round last year.

"The purchase is at such a nosebleed level that it raises concerns about what's happening under the covers with the core business," said Brian Schwartz, a senior analyst at investment firm Oppenheimer & Co.

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Adobe shares retreated nearly 17% Thursday following the announcement and a further 3.12% on Friday. The stock is down about 47% this year, underperforming the wider market.

Adobe Chief Executive Shantanu Narayen has defended the acquisition as "transformative," adding on an analysts call that large deals are often viewed with skepticism.

The current weak economic backdrop, he said, presented the right moment for the company to act.

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"Stronger companies are actually the companies that should be making the moves to position themselves to serve customers for decades," Mr. Narayen said in an interview. "We really believe that the opportunity for us is to usher in this new world of collaborative creativity."

Mr. Narayen's ability to buy Figma at that price in large parts rests on the success he had transforming Adobe a decade ago. Mr. Narayen took over the company in 2007 when it sold its software to users, typically on disks. But the software business was morphing as the growing field of cloud-computing gave rise to selling such products online, as a service and on a subscription basis.

In 2011, Mr. Narayen embraced the shift, setting Adobe up as the then-rare incumbent software provider to adapt to the emerging sales model that has now become ubiquitous. The company at the time had around $4.2 billion in annual sales. It now generates more than that in a quarter. Adobe grew into a software giant with a market value at $320 billion at its peak last year and its stock had advanced 10-fold over the past decade prior to the Figma deal being announced.

During Adobe's shift to the cloud, there were naysayers, too, questioning the company's strategy, Mr. Narayen said. "Everybody points to the few people who have questions whenever change happens, but the believers are the ones that you really want to prove right," he said.

Other software powerhouses were slower to adapt. Oracle Corp. , the large provider of database software, for years played down the importance of cloud computing and now is spending heavily to expand those activities. International Business Machines Corp. similarly was slow to transition to the cloud and then spent around $34 billion in 2019 to acquire Red Hat Inc. to bolster its presence in the market.

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Adobe executives say buying Figma will spark a new era of growth. "This is about positioning the company to define new categories and drive growth for decades to come," Chief Financial Officer Daniel Durn said.

Figma, Adobe said, would also help it tap a new user base. The company says that in addition to the designer community that already uses its tools, Figma would add developers and others that typically haven't been its customers.

To prove skeptics wrong, Mr. Narayen said, the company would focus also on demonstrating strength in its core business.

The deal, which still has to pass regulatory scrutiny and otherwise is set to close next year, would add collaboration features to Adobe products the company has struggled to build itself. In 2016, Adobe launched a collaborative design tool, but it didn't gain traction in the market, said Scott Belsky, Adobe's chief product officer, and the effort has been largely wound down. Now, he said, Adobe plans to start making more of its design tools available inside Figma, such as image-editing capabilities from Photoshop, to ease collaboration.

Figma users, though, are worried about the combination. Mr. Vinci, the independent web designer that loved the startup's product, said he's currently looking at alternatives like Dutch design software company Sketch BV.

Write to Aaron Tilley at aaron.tilley@wsj.com

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Why Adobe Wants Figma and Why Some Investors Are Worried

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Adobe Inc., the low-key maker of digital tools to create PDFs and edit photos, pleased investors by reinventing itself as a subscription-software business. Its latest effort to keep pace with the times isn't landing so well. Adobe this past week unveiled its largest-ever acquisition, agreeing to buy Figma, a little-known software startup that specializes in helping digital creators collaborate.

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4-Rob Parson at Morgan Stanley B to D copy

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Shalgymbayeva Amina 19084598d
Caitlin Ashley 19085054d
LIN Xiangru Edward 18080593D
Ashfaq Raveena Singh Alday 21032154d
Gurung Smriti 21032833d
Lui Shuk Yu LindaNicole 21033685D
Lessovichenko Alexandr 20070171D

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Shalgymbayeva Amina 19084598d
Caitlin Ashley 19085054d
LIN Xiangru Edward 18080593D
Ashfaq Raveena Singh Alday 21032154d
Gurung Smriti 21032833d
Lui Shuk Yu LindaNicole 21033685D
Lessovichenko Alexandr 20070171D

# data[].attributes.body
Shalgymbayeva Amina 19084598d
Caitlin Ashley 19085054d
LIN Xiangru Edward 18080593D
Ashfaq Raveena Singh Alday 21032154d
Gurung Smriti 21032833d
Lui Shuk Yu LindaNicole 21033685D
Lessovichenko Alexandr 20070171D

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Compare the torque - operating profit margin (operating income/sales) for Nintendo, Sony and Microsoft. Yahoo Finance for 2019 and 2020.

https://finance.yahoo.com/quote/SONY/financials?p=SONY

https://finance.yahoo.com/quote/MSFT/financials?p=MSFT

https://finance.yahoo.com/quote/NTDOY/financials?p=NTDOY

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Does it add value? If not, how to improve?

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Does it add value? If not, how to improve?

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Case 1:
A company selling presenter shows a promotional code of 5% discount as a banner on its website. A customer found that he couldn’t use the promotional code before checking out the shopping basket.

Case 2:
An online digital marketing course academy offered a four-week free lesson plan for a three-month course. A customer learner paid the fee to download the learning materials, which he found helpful for his reference. The academy charged the customer for the full course fee before the end of the four weeks. The customer appealed the case to an internet payment platform unsuccessfully but successfully appealed with the credit card company.

Case 3:
An investment platform for the financial markets uses FPS for customers to transfer funds and a chatbot to provide customer service.

Case 4:
The solicitor firm/property developer staff always communicates with the clients by phone during regular office hours (9-5, five days) and not via WhatsApp or email.

Case 5:
A massage chair manufacturer offered an additional discount and a delivery and installation service for dual locations within a year. The customer tried the massage chair several times at the shop, and the customer will relocate the home soon. It was a special offer made by the saleslady in the shop.

Case 6:
An online research course targeting researchers interested in using R. After filling in the registration form, there has been no reply or follow-up despite a reminder email sent to the admin email address.

Case 7
A customer made a visiting appointment at 4:15 p.m. with a dental clinic. The clinic asked the customer to conduct the RAT test within 12 hours before the visit and arrive at the clinic 15 mins before to do the registration. The customer followed all the requirements but did not get the service until 4:50 p.m.

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Free shipping on purchase over HKD600. Due to the pandemic, please expect the shipping would take 2-3 working days longer than normal. We will try our best to speed up the service for you. Sorry for any inconvenience.

Free shipping on purchase over HKD600. Due to the pandemic, please expect the shipping would take 2-3 working days longer than normal. We will try our best to speed up the service for you. Sorry for any inconvenience.

Pick up your online order at the nearest Logitech Store

Pick up your online order at the nearest Logitech Store

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Logitech Club - Logitech HK Official Online Store

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Free shipping on purchase over HKD600. Due to the pandemic, please expect the shipping would take 2-3 working days longer than normal. We will try our best to speed up the service for you. Sorry for any inconvenience. Free shipping on purchase over HKD600.

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Sin Yee Ching 19101504D
Chiu Ka Yu 19101495D
Wong yin Lam 21019123d
Lam Wai Hin 21032283D
Cheng Cham Pui 21033082D
Chu Sung Yeu 21032513D
Lee Tsz Yan 21023343D

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HUA Yingkai Stella 19095732D

IP Ho Yin 21005219D

LI Teresa Yu Tung 19080173D

PO Yan Ting 19070526D

WANG Yaojie 19081103D

YU Yang 19086532D

YUE Zitong 19079427D

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The Fall Before Rising_ The Story of Jai Jaikumar

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HO CHUN HO 21066058D

HUA Yingkai Stella 19095732D

IP Ho Yin 21005219D

LI Teresa Yu Tung 19080173D

PO Yan Ting 19070526D

WANG Yaojie 19081103D

YU Yang 19086532D

YUE Zitong 19079427D

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Ng Ki Wing 21059874D
Chow Long Him 21056393D
Law Man Him 21032962D
Leung Wai Choi 21033098D
Yu Wai Leung 21031484D
Wong Lok Hin 21028498D
Chung yan yan 21028323d
Kwong chi him 21029023d