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CNET News.com: Devil is in the details [of Realnetworks-MS agreement]

Apr 13, 2000, 16:21 (12 Talkback[s])
(Other stories by Evan Hansen, Jim Hu, Mike Yamamoto)

"Web analysts and executives sum up the situation this way: At best, RealNetworks sees the need to include Microsoft technology in its products because it can no longer ignore Windows Media Player as demand for both formats grows. At worst, the company is already looking for an exit strategy from the software sales business as it recognizes that Microsoft is encroaching on its turf at a relentless rate."

"...unlike Netscape's original plan to charge for its browser, RealNetworks has given away some versions of its multimedia player from the start, receiving its primary revenue from the servers used by the content companies doing the streaming. Moreover, Microsoft's reach on the server side is tied to the success of Windows 2000 and Windows NT, meaning that RealNetworks isn't likely to disappear as long as Unix, Solaris, Linux and others remain viable competitors in operating systems."

"Business associates say both RealNetworks and Netscape underestimated Microsoft on numerous fronts, including the power of packaging its products with the Windows operating system, especially free of charge; the effect of billions of dollars in resources used to buy competitors; the marketing machine and industry influence of the world's largest software company; and the armies of engineers dedicated to research and development that allow Microsoft to cut into market shares exceeding 80 percent."

"Industry veterans say any broad cooperation with Microsoft at this juncture is tantamount to raising a white flag, at least in the immediate fight over the use and sale of streaming software. Although it is unclear whether any legal issues will come into play, they see further parallels to Netscape in RealNetworks' redirection toward a portal and Web services."

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