In a bid to capture the lucrative ecommerce software market Macromedia is to acquire Andromedia in a merger deal that will allow developers to create content with built-in tracking, profiling, modelling, analysis, personalization and reporting capabilities for corporate Internet, intranet and extranet sites.

Macromedia has also announced plans to establish shockwave.com, its recently formed online consumer entertainment business, as a stand-alone, independently capitalized company.

News of the merger came during this week's Internet World show in New York.

"We are very excited to be joining forces with Andromedia," said Rob Burgess, chairman and CEO of Macromedia. "The current patchwork of products that companies are using for e-business are not addressing their needs. By combining forces, we can execute our shared vision of delivering a better way. Our teams really fell in love."

Existing customers for the newly merged organisation include: Audi, Intuit, Levi Strauss & Co, Sony and Sun Microsystems.

Andromedia makes marketing software for e-commerce. Kent Godfrey, Andromedia's CEO, will join Macromedia's senior management team managing strategic e-business initiatives.

The Andromedia merger is a good move for Macromedia, since it's been trying to add more personalization features for its ecommerce products, said Tony White, an analyst at Giga Information Group. Andromedia's strength is in personalization, a feature Macromedia lacks - and now it can complete its product line, White said.

Andromedia's ARIA Web analysis software and LikeMinds personalization software help create "a better online experience with commensurately boosted sales". ARIA is a data-capture and analysis device, reporting meaningful statistics on customer behaviour. LikeMinds engages customers with accurate product recommendations and personally relevant content to help them choose their products.

Macromedia, probably best known as the maker of popular Flash and Shockwave players for the Web, said it will buy all of Andromedia's outstanding stock in a stock-for-stock deal. Existing customers for the newly merged organisation include: Audi, Intuit, Levi Strauss & Co, Sony and Sun Microsystems.

The move to spin-off shockwave.com is intended to increase the performance of each division, Burgess said in a statement, noting that Macromedia is a software company and shockwave.com an entertainment firm.

Since its launch on August 2 this year, shockwave.com has registered more than 3 million users, making it the number three animation site and number four game site on the Web, according to Macromedia.