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March 4, 2007


MacroMind*Paracomp:: Old news -- from 1991, in fact -- but I wanted to get it into the weblog's database here, for reasons of both linkrot protection and for easier searching later. Denise Caruso's Digital Media newsletter (archive) contains contemporaneous accounts of the various phases of MacroMind, MacroMind*Paracomp, and then Macromedia. Excerpts and source links in the extended entry.

NB: I believe that the following complies with fair-use policies for historical materials, but am open to further feedback. There are no explicit dates on each article and I can't be sure when each was written. The rest of Denise's archive contains lots and lots of interesting material (debate on charging for runtimes, pre-Macromedia Authorware, more)... the first year is in .TXT; the subsequent in .DOC. I'm also including a couple of the remaining live web references I've found from other sources.

August 1991 "Digital Media"

MacroMind, Paracomp to merge

In a move designed to create critical mass in a market filled with small, struggling software companies, two San Francisco-based multimedia software companies -- Macromind Inc., of Director and MediaMaker fame, and Paracomp, known primarily for its Swivel 3D and FilmMaker products -- have signed a letter of intent to merge.

Both companies claim the move is indeed a merger and not a thinly veiled buyout. The new company will be called Macromind/Paracomp, already dubbed "MMPC."

Two months, start to finish. Tim Mott, president and ceo of Macromind, said what began as discussions about joint promotions only two months ago turned almost immediately to the idea of a merger. According to Mott, it took their respective boards "about two nanoseconds" to realize the potential in such a deal.

Paracomp brings to the table its expertise in 3d graphics construction and animation, and Macromind provides its experience as a pioneer in media integration tools. For the "creative professional," MMPC will continue to deliver tools for graphics, animations and multimedia presentations.

Though both companies' products are well regarded within the industry, it's widely known that they have found it difficult to be profitable in the nascent market for multimedia and graphics software. Macromind, in fact, now supplements its Director revenues by leading in-house training classes for new customers.

A changing world. In addition, competition is beginning to heat up for Director- and FilmMaker-style products; competitors are hot on the trail of creating easier-to-use multimedia authoring systems. Since 90% of Director and FilmMaker owners use both products, it was natural for Macromind and Paracomp to see the virtue in combining their reputations and resources to counter such threats.

Those more critical of the move believe that combining product lines is an easy way to avoid the higher cost of innovation while creating a larger market presence. But with MacroMind's brand-new product and underlying architecture (see sidebar, page 19), that point may be hard to prove.

However, both companies have been struggling financially for years, and it's said they want to take the combined company public some time next year. To do so, their balance sheets must look significantly better than they do today.

Product consolidation. While the initial opportunities will be in joint sales and marketing ventures, the two companies will ultimately combine their particular spheres of influence to create new products and solutions for multimedia producers.

Mott says that there are no immediate plans to scrap any products or merge them into a single entity. He explains that MacroMind's research shows that creative professionals who use products such as Director and FilmMaker generally use same-genre products from many suppliers because they "understand the subtleties between programs, and will use whichever is right for the job."

What's closer to the truth, however, is that no firm making multimedia authoring tools has yet completely understood the needs of its users sufficiently to provide all the necessary functionality in a single product. We hope the combined knowledge of the two firms can remedy that problem.

Mott acknowledges the probability that MMPC will develop, over time, a more streamlined product line. That's good news since no one, we believe, really wants to use two incompatible authoring systems. And MacroMind 3D is already functionally compatible with Swivel 3D Professional.

Who's at the top? Mott will hold the title of ceo of the new company, while Bill Woodward, currently ceo of Paracomp, will serve as its chairman. They will share a so-called "Office of the President." Mott will initially be responsible for international operations, finance and product development. Woodward will be responsible for U.S. sales and marketing.

Senior management will consist primarily of MacroMind veterans, including vps of product development and marketing, as well as the cfo. The vp of sales comes from the Paracomp side.

Mott says that the final agreement will be signed in early August. MMPC plans to move into shared quarters by year's end.

December 1991 "Digital Media"

It's official: multimedia pioneer Marc Canter leaves MacroMind

Marc Canter and MacroMindlParacomp Inc. have parted ways. Canter, who founded MacroMind in 1984 and who for many years was the most visible and vocal industry promoter of multimedia technology, has left the San Francisco-based company, effective January 1.

Canter began a six-month leave of absence from MacroMind in February, amidst rumors that he would soon leave the company. He will continue as a director and remains its largest shareholder.

Canter added that his departure was a "mutual decision" made by him and MacroMind, which this year merged with graphics software developer Paracomp, also based in San Francisco.

Industry sources, however, say Canter was dissatisfied with the change of direction MacroMind had taken, including its merger with Paracomp and its acquisition in November of sound tools -- the Mac Recorder digitizer and SoundEdit software -- from Farallon.

Tim Mott, MacroMindlParacomp president and CEO, said that Canter's departure will have only a "minimal" effect on the company. "He has been absent from the company for most of the last year while on sabbatical and this will effectively and operationally be a continuation of that," Mott said, adding that Canter will continue to work as a consultant for the company.

March 4 1992

Multimedia Co.'s Macromind-Paracomp/Authorware to merge

Multimedia Co.'s Macromind-Paracomp/Authorware To Merge 03/04/92 SAN FRANCISCO, CALIFORNIA, U.S.A., 1992 MAR 4 (NB) -- Two multimedia software companies, Authorware and Macromind- Paracomp are merging to form the largest independent supplier of multimedia software.

Though financial details have not been disclosed, both companies have said they will have an equal interest in the new endeavor, which they say will be named at the finalizing of the merger in April of this year.

Tim Mott, president and chief executive officer of MacroMind- Paracomp, will become chairman and chief executive officer of the new company. John C. "Bud" Colligan, president and chief executive officer of Authorware, will be the new company's president and chief operating officer.

Mott said: "Multimedia is one of the most exciting opportunities in computing and consumer electronics today. However, there has been a strong need for a software company with the critical mass to establish multimedia as a predominant form of communication, entertainment, and education."

April 1992 "Digital Media"

Merger mania in the tools business

Forming what one company executive called the ''largest multimedia toll maker,'' low-end multimedia software developer MacroMindParacomp and high-end developer Authorware officially merged as of March 31.

Tim Mott, MacroMindParacomp president and CEO, will take over as chariman and CEO of the newly renamed Macromedia. Authorware president and CEO Bud Colligan takes on the job of president and COO. The two companies will have combined worldwide staff of between 170 to 180 people.

While financial details of the agreement were not disclosed, the companies said they had combined earnings of about $25 million in 1991 -- with Authorware accounting for about $12 million. Widespread industry speculation is that the deal was designed to give both privately-held companies an extra boost in their effort to go public, which is expected to happen soon (they are, in fact, in their ''quiet period'' now).

Mott denied that the deal was IPO driven. ''There were no considerations like that that drove this deal,'' says Mott. ''This merger is about being positioned for the long term.''

Posted by JohnDowdell at March 4, 2007 12:37 PM