Today’s announcement about Adobe’s acquisition of Analytics company Omniture for $1.8 billion was, for the most part, a surprise.  This deal actually reminds me of the Akamai acquisition last year of Behavioral Targeting company Acerno for $95 million.

In both cases the more traditional software/technology companies are buying marketing data and analysis companies.   It’s a venture in the direction of the customer, marketing, and the advertising business.  It’s fascinating and hilarious to see software companies turn into ad agencies and online marketing firms.  I can only imagine what it’s like within these corporate culture.

As more ad dollars flow to the web (inevitable) these companies are smart to position themselves to get a piece of the pie.  Kudos to technology companies for venturing into the world of marketing, and even more importantly the customer.

And now for the M&A CEO snippet game!

“Adobe customers are looking to us for solutions to deliver engaging experiences and more effectively monetize their content and applications online,” said Shantanu Narayen, president and chief executive officer of Adobe. “This is a game changer for both Adobe and our customers. We will enable advertisers, media companies and e-tailers to realize the full value of their digital assets.”

READ: We are now not only a software company, but also a media agency.

“Omniture’s mission has been to enable our customers to optimize every digital interaction,” said Josh James, CEO of Omniture. “By joining forces with Adobe, we will accelerate our ability to deliver on that vision and together bring new innovation to the market that improves content engagement, advertising effectiveness and the overall user experience, which will drive more advertising dollars online.”

READ:  We’ll teach this software company how to think about the ad business.

Yesterday IBM acuired SPSS for $1.2 billion.  SPSS is in the business of analyzing large amount of data and building models that look at the data in ways useful to a business.  IBM is smart to start providing tools and services to power the web-based world.

Software like SPSS will become more valuable as we move into a networked, Internet-based software world. Data mining is a key competitive component of  operating a network, in particular Internet businesses.

SPSS hits the sweet spot in the Network universe.  Be it a social network, ad network, or news network – how you create value out of your data is key to your business.  Sometimes called the network effect, Metcalfe’s law states (in general terms) that the value of a network increases exponentially as more users join. Here’s a snippet from Wikipedia on one aspect of the law:

In addition to the difficulty of quantifying the “value” of a network, the mathematical justification measures only the potential number of contacts, i.e., the technological side of a network. However the social utility of a network depends upon the number of nodes in contact.

Software like SPSS creates greater social utility by putting potential connection in contact.

Here are a few examples of how Internet companies create value from their network:

LinkedIn – Their “People You May Know” tool analyzes your network and predicts who you may know based on the properties of your network

Facebook – Suggested friends is based on the makeup of your friend network and their friends, and their friends friends, and so on.  It’s data mining turned cool.

Amazon - Their recommendation engine is a key reason they have been so succesful.  That engine is based on their network and what they buy.

Ad Networks – Use data on ad performance on network sites to show ads that are most likely to make the publisher money and be effective for the advertiser, based on real-time data.