Microsoft to quadruple money from RealNetworks stake sale

Face it, is it really possible to compete with a company that can make money out its rivals through VC funding?

The split between Microsoft and RealNetworks has reached its logical conclusion, with Microsoft announcing it's to sell its 10 per cent stake in the company. And it's no doubt a source of some considerable irritation to RealNetworks that the stock price in currently around four times the $8.99 a share Microsoft paid 15 months ago. RealNetworks' breach with Microsoft closely parallels the arguments Apple has been having with the company in open court over QuickTime. Company boss Rob Glaser (ex-Microsoft himself) testified to the Senate Judiciary Committee hearings earlier this year, and claimed Microsoft had broken his company's media player, just as Apple's Avie Tevanian claimed Microsoft had broken QuickTime. As with QuickTime, Microsoft retorted that it was RealNetworks' fault. But Glaser had the added disadvantage of having apparently tried to trade not testifying for having his problems with Microsoft resolved, so as a witness he didn't look entirely pure. The big problem for RealNetworks, however, was that it was part of a Microsoft strategy that had been superseded. Microsoft had intended to integrate its technology, but switched to concentrating on its own media player instead. (Note for conspiracy theorists - as part of its alliance with Apple, Microsoft resolved all intellectual property disputes, including the use of QuickTime code in Microsoft's media player. This happened after the investment in RealNetworks, and may have been influential in the change of plan.) Once the integration deal was no more, and relations had been trashed by Glaser's testimony and outbursts, the two companies were effectively competitors. RealNetworks is now in bed with AOL, Netscape and IBM, among others. Microsoft says it wrote to RealNetworks in June saying it wanted to cash out via a public offering, but although RealNetworks was initially interested, it has gone cold on this more recently. Still, quadrupling the value of the stake should help the Redmond latte fund. ®

Sponsored: Network DDoS protection