Quark said in August it was interested in pursuing discussions with Adobe to buy all or a part of its rival, but San Jose, California-based Adobe said that it was not for sale.

Adobe and Denver-based Quark together dominate the market for publishing and graphics software used to print newspapers, magazines and brochures with products such as QuarkXPress and Adobe's PageMaker.

"Since last week, we have again tried to open a dialogue with Adobe, but to no avail -- they have not returned our phone calls. We wanted to engage in friendly discussions regarding the specifics of our proposal, but Adobe is not even willing to do that," Quark president Fred Ebrahimi said in a statement.

Adobe said it was pleased that Quark decided not to pursue the acquisition. "We are verygrateful for the tremendous support we have received from our business partners, customers and our employees," Adobe co-chairmen John Warnock and Charles Geschke said in a statement.

Quark said it would pursue other acquisitions that would help it provide new products and services.

"Adobe has made it clear that it is not interested in pursuing any type of friendly transaction, even if it would benefit the Adobe stockholders," Ebrahimi said.

Quark founder and chairman Tim Gill said the company had sought a friendly deal with Adobe and did not think that a hostile takeover would benefit "Quark, Adobe, the Adobe stockholders or our respective customers."

"Not only would this involve a protracted and expensive legal battle in light of Adobe's poison pill and other defences, but we are also concerned that it could significantly detract from our day-to-day business operations," Gill said.

In recent months, Adobe has been hurt by slowing sales of its software to users of Apple Macintosh computers andplunging sales in Japan. It also has been criticised for a lack of new products.

Adobe stock is now at $28.50, up 50 cents from Friday, but down sharply from its 52-week high of $53.125 on the Nasdaq. Industry analysts had said, however, that they doubted the 17-year-old Quark could raise the money to buy Adobe, whose 1997 revenue of $919 million dwarfs Quark's, and that any deal would have faced high antitrust hurdles.

"The whole thing was preposterous anyway," said Peter Rogers, an analyst at Volpe Brown & Whelan. "I don't think it will surprise anyone on Wall Street.... Smaller company going after bigger company, private company after public company, and no clear financing plans," Rogers said.

Quark had suggested remedying antitrust concerns by selling off Adobe's PageMaker and its new K2 product. Customers had seen K2 as direct assault on Quark's core business, which has about 95 per cent of the market for high-end, sophisticated page layout programmes.