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Author: Manlobbi Big red star, 1000 posts CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1173  
Subject: StreetSideInvestor CEO Interview Date: 7/26/2000 1:58 AM
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Here is a short interview with the CEO of Macromedia, Robert Burgess. It is interesting to note that the company, Shockwavem, has already been completely separated from Macromedia. Most of the stock is owned by Macromedia, and it is just a case of waiting for Macromedia to float Shockwave publicly. I'm so glad Shockwave has been separated with its own management, because I want Macromedia to stay very focussed. Burgess seems to be highly focussed but passionately supporting partners where appropriate.

Also, I don't see why people are so concerned with Adobe. To begin with, they are not a major competitor. Adobe doesn't own any internet standards. What is PDF? Its a printer format. Macromedia owns Flash. Where will PDF be in 10 years? Where will Flash be? Really try to picture the importance or unimportance of Flash and how it will evolve as bandwidth increases dramatically. Believe me, it won't stay the same. But it is profoundly importantly that Flash is really becoming a solid standard. That was what made Microsoft; solid management with the complete ownership of something that everyone increasingly relies on. We are already at the stage where Microsoft is starting to include Flash movies in parts of its website. How much as Sun Microsystem's stock climbed on the basis of Java? How much has Adobe's stock climbed on the basis on owning the PDF format? How does the PDF format compare to the Flash format in importance going into the future? As Burgess said: "We are really just at the beginning". I believe he is very correct.

- Manlobbi


<---------- Interview begins ---------->

Good Morning, this is John J. Henry for StreetSideInvestor's Executives' Corner. This morning, we're speaking Robert Burgess, Chairman and CEO of Macromedia, Inc. (Nasdaq: MACR). Macromedia, Inc. develops and distributes solutions for creating engaging and effective next generation Web sites. The Company's software products and technologies are focused on maximizing opportunities in three key areas: Web publishing, eBusiness solutions, and Shockwave.com.

StreetSideInvestor: Could you please comment on the earnings that were released on Thursday, July 20th (Macromedia beat the streets by $0.08 per share reporting revenues of $0.26 per share for the quarter)-- what should these earnings tell investors about the future of Macromedia?
Mr. Burgess: We think it is a good solid result that comes from the growing acceptance of our products, particularly Dreamweaver, Flash, and Fireworks, and the growth of the Internet. As for the future of Macromedia, we intend to be a company that delivers growth and earnings. Here we see 85% revenue growth, and 300% earnings growth and we intend to continue to invest substantially in the business so that we can show revenue growth and earnings growth on a long-term basis.
StreetSideInvestor: Where do you see the Internet going and how is Macromedia planning on being a part of the Internet of the future?
Mr. Burgess: We see major trends right now in creating the next generation of the web. I read something that showed that is now 2 billion pages on the Internet and the growth rates if they continue will have that number double within a year. So the volume of web pages is going up, but also what people are doing on those pages is also different. Now instead of just text, people are adding increased graphics, sound, interactivity, and hooking them up dynamically as opposed to having a static page. In all of those cases, Macromedia has a lot of the top brands associated with making all of this possible.
StreetSideInvestor: What gives Macromedia a competitive edge over the competition -- such as Adobe Systems Inc.
Mr. Burgess: We actually have about a one-third overlap with Adobe. They have a variety of products that are for graphics, design, and e-paper kinds of products such as .pdf for static text. Macromedia actually does not have anything that directly competes with those. Similarly, we have a variety of multimedia products that Adobe does not have anything to compete. Our main competition right now is between Dreamweaver and GoLive, which do similar things. We have well over 70% market share and actually over 80% market share on the Windows platform. The fundamental advantage that we enjoy here is that Dreamweaver is programmable. It is a platform and we have hundreds of companies around the world writing extensions to Dreamweaver and that is really its main competitive advantage right now.
StreetSideInvestor: You said that Macromedia and Adobe doesn't have any direct competition -- but what about Macromedia's Fireworks and Adobe's Photoshop?
Mr. Burgess: These two programs are not really directly competitive. Photoshop is an image-editing tool for all kinds of images and Fireworks is really targeted specifically towards the Internet. So a lot of people need a general-purpose tool and they buy Photoshop, however if it is a web only type of application, and especially if you are using Dreamweaver, that is where Fireworks provides a real competitive advantage. The workflow between Dreamweaver and Fireworks is awesome, and that is really where Fireworks is targeted.
StreetSideInvestor: Macromedia has gone beyond just being a manufacturer of products for the Internet with its launch of Macromedia Ventures. Could you please comment on this fairly new aspect of the company and how it will contribute to the future success of Macromedia?
Mr. Burgess: We put ourselves in an ecosystem here that we have a lot of the core, but there are thousands of companies that we are involved with at many different levels. Each one of these companies we want to be involved with an help them take the web to the next generation, but all of these companies' product lines do not make sense in our core business. Macromedia Ventures is investing in companies that share the Macromedia vision of the rich-media, multi-device, broadband Internet of the future. These companies are part of the Flash ecosystem, or Dreamweaver ecosystem and are taking our product lines either into the wireless area, the embedded area, or to the enhanced television area. We want to be supportive of these companies and help them along. A lot of the times the venture investments go along side an operational or strategic relationship with these companies. It is really designed to help the ecosystem advance at a rate more quickly than it otherwise would.
StreetSideInvestor: There have been rumors that Macromedia will be spinning off Shockwave.com sometime this year -- and that an IPO will soon follow the spin-off. Could you comment on the validity of this statement?
Mr. Burgess: Shockwave.com has been spun-off from Macromedia. It has separate capitalization, a separate board of directors, separate employees, a separate set of assets, and a separate facility. So it is separated now, but Macromedia does own the majority of Shockwave.com. We have announced that we intend to take it public sometime within a year. This is where we stand at the moment.
StreetSideInvestor: Lastly - Is there a closing thought that you would like to leave in our readers' minds about Macromedia?
Mr. Burgess: We are really just at the beginning. The web is a very powerful phenomenon of our time but it has all just really started and we are thrilled to be providing a lot of the most advanced technology to help people create their vision of what the web can be. We are very passionate about what the web can be, and we are enjoying our role in helping people take it to the next level.
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