Microsoft sells its stake in RealNetworks

RealNetworks has downplayed Microsoft's decision to sell its minority stake in the company, saying it had expected the move for some time.

"Beginning last spring, it became clear that the two companies' business strategies were not aligned," RealNetworks said in a statement released yesterday, one day after Microsoft announced that it was selling its 10 per cent stake in the maker of the RealPlayer streaming media player.

Just like Microsoft, RealNetworks in its statement made no reference to the public falling out between the companies. In July of this year, RealNetworks CEO Rob Glaser testified before the US Senate Judiciary Committee that Microsoft intentionally "broke" his company's RealPlayer G2 software.

While pledging that the company would continue to make its products "work well" with the Microsoft Windows family of operating systems and its Internet Explorer Web browser, Glaser also said in today's statement that Microsoft's move further validates the importance of the streaming media market.

"We're very pleased with our continued 85 per cent market share of streaming media Web pages, growth from 12 million to 38 million users, and 100 per cent revenue growth over the past year. Microsoft's action is further validation of the importance and tremendous potential of the streaming media market," the statement said.

"In the past three and a half years, there have been many competitors in the streaming media market including Microsoft. We have continued to dramatically grow our business and deliver the products most people choose to standardise on," the statement added.

In an interview with CNBC today, Glaser also said that RealNetworks "may soon" face heightened competition from Microsoft, but that it is likely "to be a difference in degree, not kind".

"They've tried to compete with us for a couple of years now," Glaser said in the CNBC interview. He added that RealNetworks' increasing focus on networked streaming media will provide the company with an advantage in the market, which has become a "pure software game".

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