When Adobe Chief Executive Bruce Chizen picked up Flash developer Macromedia (nasdaq: MACR – news – people ) for $3.4 billion in stock last year, its latest version–Flash 8–was just launching. The update pledged much-higher-quality video than previous editions, thanks to a new movie-compression method from a small company called On2. What followed was a deluge of interest, pushing Flash ahead of video-streaming pioneers RealNetworks (nasdaq: RNWK – news – people ) and QuickTime-developer Apple Computer (nasdaq: AAPL – news – people ).

Does it mean Flash has a head start in the growing online video market, which is estimated to be a US $1.7 billion by 2010.  Forbesonline has more on Adobe’s new acquisition–Flash.