Adobe Systems, the software developer, today announced that it would buy Macromedia, the internet multimedia specialist, in an all-share deal worth $3.4 billion (£1.8bn).

The move allows Adobe, which is best know for its Acrobat document applications, to take a major step into online interactive media and could open up the potentially massive mobile phone market.

Macromedia, which developed the Flash software that powers animated graphics found on millions of web pages, holds around 30 per cent of the interactive web-design market.

Adobe said it aims to produce "an industry-defining technology platform" with the combination of its PDF software and Macromedia’s flagship Flash platform.

Through the acquisition, Adobe will reach an estimated 3 million web developers and can expect the size of its current market of graphic artists and marketing executives to expand by 60 per cent to 8 million, Jamie Friedman, an analyst at Fulcrum Global Partners, told the AFP news agency.

"Macromedia has been pushing the digital age for a number of years; Adobe wants to get into that space," said Bola Rotibi, a senior applications analyst at Ovum, the market research group.

Macromedia recently pointed to the mobile phone market as a likely source of growth. Earlier this year it announced that Samsung Electronics would include Flash in its mobile phones.

"The applications, content and experiences that we can build into our mobile phones are truly awesome," Rob Burgess, the chairman of Macromedia, said.

"I think the developer community is all very excited about it, and as we get increasing population of Flash on devices shipping into the market and operator support, I just think it bodes very well for a fabulous market opportunity for the next decade of Macromedia."

Flash animations are popular with advertisers who hope surfers will be enticed to click on eye-catching adverts on their way to making a purchase. Internet advertising has shown strong growth in recent months with major names such as Yahoo pointing to a "tipping point" in the sector's fortunes.

The terms of the deal, which have been approved by the boards of both software developers, set a 25 per cent premium for Macromedia shares, based on the stock’s close on Friday of $33.45. Holders of Macromedia shares are to receive 0.69 shares of Adobe for every share of Macromedia.

Amid a sharply negative market, Macromedia shares surged 13.6 per cent in early speculative trade in London, to $38. Adobe had closed at $60.66 on Friday, down 4.4 per cent on the day as disappointing earnings news from major tech companies such as IBM sent the American markets sharply lower.

Separately, Adobe said it expected earnings and sales in the three months to June 3 to come in "toward the high end" of its targeted range amid "strong demand of Adobe Acrobat." Adobe had set the range at revenue of $475 million to $495 million.

The company added it was "experiencing solid demand in all of its major geographic markets."

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