Will HTML5 Have an Impact on Adobe?

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 |  Includes: AAPL, ADBE, GOOG, MSFT
by: This is the Green Room

With the recent announcements that YouTube (NASDAQ:GOOG) and Vimeo are both releasing HTML5-based video players, one has to wonder about the impact of those moves on Adobe (NASDAQ:ADBE). Adobe’s Flash had been (and is) THE standard for delivering multimedia content over the web, capturing something like 99% of internet users. HTML5 allows many Flash-like animations/videos/experiences without the need for a seperate plugin or buffering (that’s right – skip to a different point in that YouTube video without waiting for it to load!).

Adobe doesn’t derive much revenue from Flash – so this isn’t going to crimp their cashflow necessarily – but it is a major part of their broader brand recognition. (For the curious, Flash and other platforms generate about 6% of Adobe’s revenue, but half of that comes from Mobile solutions that likely don’t include Flash. Creative software is the bulk of the revenue stream, forming about 60% of the total.). I’m curious what indirect impact it could have on the rest of the company.

For that matter, Microsoft’s (NASDAQ:MSFT) Silverlight — the Flash alternative that powers the excellent Bing Maps — doesn’t have nearly the market share of its competitor. Where does this leave it?

Flash, Silverlight and other proprietary delivery systems are essentially browser replacements. They deliver web experiences which browsers on their own can not. To the extent we can move away from plugin multimedia and incorporate it directly into the web standard, that’s a good thing in my mind. Unfortunately, browser support for HTML5 is minimal – just the latest version of Safari (NASDAQ:AAPL) and the nightly Webkit builds (including non-production versions of Chrome). Plugins, by contrast, are widely supported and bring content to potentially any browser. It’s hard for me to imagine why people wouldn’t want the latest, fastest, and most secure web technology available… but then again, I’m constantly surprised by the number of TGR visitors using IE6!