Adobe has struck a deal with Metastream to license Metastream technology and acquire MetaCreations' Canoma.

(which is 80 per cent owned by MetaCreations) and Adobe announced they had signed a Letter of Intent (LOI), which gives Adobe "access to Metastream technologies".

Adobe will support the Metastream format (MTS) across its product line, and in exchange will acquire MetaCreations' Canoma. This software package creates 3D models from photographs and outputs them to the Web.

Adobe's executive vice president of worldwide products and marketing, said: "Adobe's strategic partnership with Metastream demonstrates the company's commitment to providing customers with the most advanced tools to create and deploy the most compelling and interactive content imaginable on the Web."

During a press conference at Metastream's new headquarters in New York, Metastream also announced the licensing of its 3D streaming technology by various other big players. Nike, iPIX and AOL have now adopted the format along with Adobe.

Metastream went on to launch MTS 3 – the next generation of its 3D streaming format for e-commerce. The new version has better imagery (colour accuracy, lighting, shadows and reflections), integration with other media types, such as vector graphics, object movies and iPIX panoramas.

MetaCreations announced at the end of last year that it was divesting its graphics business, and concentrating on e-commerce visualization solutions. Its subsidiary Metastream would implement its Internet strategy.

Industry watchers were expecting news on the fate of all MetaCreations' graphics software, such as Carrara and KPTX, as the company said it hoped an announcement would be made by the end of the first quarter regarding a buyer. However, no mention of the graphics products apart from Canoma was made in this announcement.