Adobe, with its new Creative Suite 3, is all the buzz now. But PhotoShop is not what makes Adobe interesting. It is Adobe's ability to establish two of its formats (PDF and Flash) as defacto standards.
Microsoft loves defacto standards. And Microsoft hates the fact that Adobe owns THE web animation standard (which is becoming the streaming media standard), and Adobe owns THE print-formatted document standard.
Microsoft tried to create an alternative to PDF, but has had zero success, despite the fact most PDF's original documents are created in Microsoft Office applications.
Which begs the question. Microsoft has a market cap of about $275 billion, compared to Adobe's $25 billion. Why Microsoft has not attempted a takeover, hostile or otherwise, of Adobe, is beyond me.
Perhaps it is all the bad blood between Microsoft and Adobe in the past. Maybe it is Microsoft's failed acquisition of SoftImage in the 1990s. But we are in a new decade, make that a new millennium.