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RealNetworks' revenue up for 15th quarter

Still hasn't made any money, though

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Streaming media specialist RealNetworks yesterday announced its fifteenth consecutive revenue growth quarter. Revenues for the three months ended 31 March reached $23.5 million, up 88 per cent on the $12.5 million the company recorded for the same period last year. Trumpeting revenue growth makes sense when your company has yet to make any profit, and Real proved no exception: for Q1 1999, it lost $700,000, compared to the $2.2 million it lost in Q1 1998. The latest figure excludes the cost of Real's purchase of Vivo Software, so the company actually lost rather more than that, but at least it shows Real is moving in the right direction profit-wise. And Real's bosses were suitably ebullient. CEO Rob Glaser described the period as "another successful quarter". "We continue to be successful in our business based on four strong pillars: great technology, a huge registered base of 60 million unique RealPlayer users, connecting consumers to great content, and an ever-expanding ecosystem of strong industry partners." The latter presumably refers to Real's alliance with IBM and its Electronic Music Management System, and deals with a stack of US telcos and ISPs. Still, we find it hard not to believe that a company forced into using environmental metaphors hasn't got problems. And Real has a real big problem: Microsoft. The Beast of Redmond's Windows Media Technologies may not offer superior playback quality to Real's G2, for all Microsoft's claims, but it will be made accessible to so many computer users, it's hard not to imagine content providers moving to WMT or at the very least treating G2 as one option among many. And even Apple threatens to undermine Real's role as official opposition to Microsoft through its canny open source-ish release of QuickTime Streaming Server. Real has the lion's share of the streaming media market, but that business is too immature to generate real revenue for the company. And now that the market is taking off, Real faces competitors who can bring some heavy weapons to the fight. Turning its revenue into profit is going to be tough, no matter how bullish its CEO. ®

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