Adobe Systems Inc.'s stock skyrocketed Thursday after a media report stirred speculation it might become an acquisition target for Microsoft Corp.
The stock rose as much as 17 percent to an intraday high of $30 before settling back. It closed up 11.5 percent at $28.69 on the Nasdaq. Microsoft shares were up 0.4 percent at $24.53.
The New York Times reported that Microsoft Chief Executive Steve Ballmer had met secretly with Adobe CEO Shantanu Narayen at Adobe's San Francisco offices "recently".
(Msnbc.com is a joint venture of Microsoft and NBC Universal.)
The two discussed Apple Inc's dominance in mobile phones and considered several options to counteract that, including Microsoft acquiring Adobe, the newspaper reported, citing employees and consultants involved in the discussions.
Adobe and Microsoft declined comment.
Such a deal could be worth $15 billion or more based on Adobe's current market value. It would mark a major offensive in Microsoft's bid for a larger share of Internet media and mobile platforms by getting hold of Adobe's popular Flash player, used by many websites for video and graphics.
It could also mean an alliance against Microsoft's archrival Apple Inc, which has been at odds with Adobe over its policy not to allow Flash-based applications on its iPhones and iPads.
"It's certainly possible," said Morningstar analyst Toan Tran of a potential deal. "It may be a case of 'the enemy of my enemy is my friend' and both Microsoft and Adobe have a common enemy in Apple. The Flash platform in Microsoft's hands might be an interesting competitive weapon against Apple."