A $50 million offer from Adobe for a company that publishes software to distribute online textbooks, magazines and other types of digital content has sparked a flurry of bidding on the deal, including bids from Google, which owns search engine Google Books, and Microsoft, which also owns the popular Outlook email and file transfer service.
The deal would give Adobe a 25 percent stake in Random House, which is based in Cambridge, Mass.
The publisher also owns N2 Publishing, which publishes magazines and ebooks for children.
The offer comes after the companies announced last month that they had entered into an agreement to merge their companies into a unit that would offer software that could help publishers sell online books.
The merger would be a boon for both companies, which have seen their ebook publishing businesses shrink in recent years.
The announcement comes just a few weeks after Microsoft bought the publishing service eLearning Unlimited, which had a market value of $20 billion.
The Microsoft-AAdobe deal would mean that the combined companies would own the largest ebook publishing service in the world, according to a report by analytics company eMarketer.
The Adobe deal would also give Adobe the largest share of digital book publishing.
Google, Microsoft and Adobe were among the big publishers to bid on the $50 billion deal, but it is unclear who else was in the running.
Amazon, the dominant U.S. e-commerce company, was also in the mix for the deal.
“It’s a pretty big deal for us, but we’re not going to be able to go out and announce it yet,” said Andrew Stoner, the vice president of digital and content at Google Books.
“We’re still negotiating with publishers.
We’re in the process of getting the paperwork together and figuring out the details.”
Microsoft also is interested in the deal and has been actively pursuing a deal with the publishing company.
The two companies are expected to discuss the deal in the coming weeks, a person familiar with the matter told Reuters.
The companies’ merger is not expected to be finalized until the end of this year, said Mark Rosenblatt, a spokesman for Google Books in New York.
The new arrangement could give the publishers more clout in the e-book market, which Google and Microsoft control by controlling the market share of the three biggest players.
Adobe is known for its large portfolio of digital media software, including its popular Photoshop software, Adobe Lightroom, and its Scribd and Paperwhite services.
In recent years, Adobe has had a hard time selling its software.
Last year, Adobe said it lost more than $2 billion in revenue and its quarterly earnings fell short of analysts’ estimates.
The company has said that its software revenues have been stagnant over the past year, though it has said the slowdown may be partly due to the launch of its mobile apps.
The New York Times reported that the deal would provide more money for Adobe to invest in technology and marketing.
Adobe has been trying to diversify its business.
Last fall, it announced a plan to sell its software division to Google.
The plan was criticized by some publishers, who said that Google was buying up too much software.
Adobe also is trying to expand its software portfolio to include the search engine’s cloud-based Office suite and the photo and video-sharing service iPhoto.
The news of the deal came just days after the U.K. government said it had rejected Microsoft’s bid for a share in a joint venture to sell digital media and software.
The U.KS. government has long sought to block Microsoft’s entry into the market, and it has warned that it would block Microsoft from selling online-only software.
Microsoft’s offer of $50.9 billion for Random House and N2 would be the largest corporate bid on a single publisher in history, according the Wall Street Journal.
Random House is based out of the Ussher Building in New Brunswick, N.J. The price tag was not disclosed.