Microsoft To Sell Its 10% Of RealNetworks
Microsoft says it will sell its 10% stake in streaming-mediadeveloper RealNetworks Inc., citing differences over product
direction. Microsoft currently owns 3.3 million shares of
the Seattle developer, which produces RealPlayer, software
that competes with Microsoft's Windows Media Player.
Microsoft acquired its stake in RealNetworks in July 1997,
when it signed a contract with RealNetworks to support the
RealPlayer file formats in Windows Media Player. Soon after,
Microsoft received code for RealPlayer 4.0 formats, and
before the company could update Windows Media Player,
RealNetworks changed file formats, making them incompatible
with the earlier code, says Gary Schare, Microsoft's lead
product manager for Windows media technologies.
By last spring, Microsoft had decided that the two companies
were going in different directions and notified RealNetworks
in June that it would dispose of its 10% stake. Schare says
Microsoft notified the company before RealNetworks CEO Rob
Glaser testified to the Senate Judiciary Committee in July
that Microsoft intentionally disabled its RealPlayer
software.
When RealNetworks wouldn't agree to a proposal made this
fall to sell the shares as an underwritten secondary
offering, Microsoft decided to sell the shares on the open
market, Schare says. RealNetworks officials couldn't be
reached for comment by press time.
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