Wave Issue 0103 1/17/01 Article 1-02

***Macromedia and Allaire to Merge
(January 16)

Macromedia and Allaire Corporation have announced a definitive
merger agreement. The combined company will unite the Web design
and development communities and enable Web professionals to build
the look of a Web site and the application logic behind it.

The combined company will evolve its Web development platform
with support for open industry standards. The first step is to
deliver on Allaire's plan to bring the development model of
ColdFusion to the J2EE standard. This will enable a solution for
building applications on the Java platform using technologies
such as XML and JSP. The next step will be to develop a set of
application services—reusable components and application logic—
that enhance the software platforms including Java and Microsoft
.NET.

In the merger, valued at approximately $360 million on a fully-
diluted basis, Macromedia will exchange 0.2 shares of its stock
and $3 in cash for each Allaire share. The merger will be
accounted for as a purchase combination and is expected to be
accretive in Macromedia's fiscal year 2002. The transaction is
expected to close by the second calendar quarter of 2001.