TELECOM Digest OnLine - Sorted: RealNetworks Mulls Buys After Microsoft Payout

RealNetworks Mulls Buys After Microsoft Payout

(no name) ((no email))
Tue, 18 Oct 2005 22:51:04 -0500

By Georgina Prodhan

Internet media software company RealNetworks is mulling more
acquisitions after receiving a $761-million payout from Microsoft
Corp. to settle an antitrust case, its chief executive said on

"Our two growth businesses have been music and games so if you could
do acquisitions that accelerate that I wouldn't rule it out," Rob
Glaser told Reuters in an interview on the fringes of a tech
conference in Athens.

"This is a business where are many kinds of opportunities," he said,
declining to elaborate on specifics of any potential acquisition

Software giant Microsoft agreed a week ago to pay RealNetworks $460
million in cash and to invest $301 million in promoting RealNetworks'
Rhapsody online music subscription service on Microsoft's MSN website.

RealNetworks had sued Microsoft almost two years ago, saying
Microsoft's decision to bundle Windows Media Player for free within
the Windows operating system was an abuse of its market dominance and
had harmed RealNetworks' sales.

Rob Glaser -- a former protege of Microsoft founder Bill Gates before
he left fo start his own company, built his business on the RealPlayer
software for playing video and audio on computers -- a rival to
Microsoft's Media Player.

In response to the Microsoft competition, RealNetworks shifted toward
online music and games, buying PC games firms GameHouse and Mr
Goodliving after acquiring -- the company that brought it
the Rhapsody service -- in 2003.

Glaser said, however, he was in no rush to buy more companies, despite
the Microsoft cash that he said would boost RealNetworks' cash and
equivalents to above $800 million by the end of the year -- more than
twice last year's sales.

"I'd rather do four acquisitions that work than do eight, six of which
work," he said. "We'd probably look at more opportunities now but I
couldn't predict that the velocity will increase."

He said he was not currently in any talks with Steve Jobs, chief
executive of Apple Computer Inc., which dominates the online music
business with its wildly popular iPod mobile music player and iTunes

"Right now it's a dormant stage in that relationship."

Glaser added he was ready to put aside rivalry with Microsoft to make
the new cooperation, which will also give RealNetworks access to
Windows technologies to enhance the RealPlayer software, work.

"We're sincere about wanting a collaborative relationship with
Microsoft," he said.

Asked whether he could imagine ever returning to Microsoft, Glaser said:
"I think I enjoy working for a company of a size big enough to get
things done but that's still nimble."

Copyright 2005 Reuters Limited.

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