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

“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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