Adobe's CEO leaves 'em wanting more

Forbes reports that Adobe Systems (NASDAQ: ADBE)'s CEO Bruce Chizen is stepping down next month to be replaced by president and chief operating officer, Shantanu Narayen. Third-quarter revenue was up 40% from the previous year. On the way out, Chizen raised Adobe's revenue target for the fourth quarter to be near the high end of the previously disclosed range of $860 million to $890 million, and Adobe is targeting overall revenue growth for fiscal 2008 to be about 13%.

In The Burning episode of Seinfeld, Jerry explains to George Costanza the idea of Showmanship: "Showmanship, George. When you hit that high note, you say goodnight and walk off." With his departure, Chizen appears to be following this principle. During Chizen's seven year tenure, Adobe's software platforms -- Acrobat, for making PDF files, and Flash for displaying videos -- are all over the place thanks to the rise of Web 2.0. Adobe is also planning to launch a Web version of the popular photo-editing software Photoshop by the end of 2007.

New CEO Narayen plans to keep Adobe grounded while expanding it into mobile devices. According to CNETNews, he'll be introducing Adobe Integrated Runtime (AIR), software that allows Web applications to run on desktop PCs. He'll also extend applications written for AIR and Flash to help Adobe expand its reach further into mobile devices and set-top boxes and gaming machines.

Unless it's later discovered that Chizen quit for some nefarious reason, with its stock off 17% from its all-time high a few weeks ago, this could be a good entry point.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Adobe shares.