[IP] Microsoft settles RealNetworks disputes
Begin forwarded message:
From: Michael Berman <michael.berman@xxxxxxxxxxxxx>
Date: October 11, 2005 1:48:01 PM EDT
To: dave@xxxxxxxxxx
Subject: Microsoft settles RealNetworks disputes
Microsoft Corp. (Nasdaq:MSFT - news) on Tuesday said it will pay
RealNetworks Inc. $761 million to resolve their disputes, including a
lawsuit that accused the world's largest software maker of using its
dominance in operating systems to promote its rival media software.
RealNetworks (Nasdaq:RNWK - news), the Internet media software
company known
for its Real software has said Microsoft's decision to bundle Windows
Media
Player for free within the Windows operating system was to blame for
slower
sales at the RealNetworks' business division.
RealNetworks' suit is the last remaining major antitrust action
against the
software giant, which has spent the last three years reaching agreements
with several U.S. states, the European Union and other companies,
such as
International Business Machines Corp., Time Warner Inc. and Sun
Microsystems.
The cases came in the wake of the landmark 2002 antitrust settlement
with
the U.S. government.
Microsoft will pay RealNetworks $460 million in cash up front to
resolve all
damage claims. RealNetworks will also get licenses and commitments
that give
it long-term access to Windows Media technologies that will enhance
the Real
Player software.
Microsoft has also pledged to promote RealNetworks' music and game
subscription services through the MSN Internet network, specifically
RealNetworks Rhapsody subscription music service.
Microsoft said it will pay RealNetworks $301 million in cash and will
provide services over 18 months to support Real's product development,
distribution and promotions. Microsoft will earn credits against the
$301
million for subscribers to Real delivered through MSN.
RealNetworks also said it will take steps to support MSN search. Both
RealNetworks and Microsoft will market the use of Windows Media
technologies
with Rhapsody.
Rhapsody has won kudos from analysts and some fans, but its market
share is
dwarfed by Apple Computer Inc.'s iTunes download service, which has a 70
percent market share.
The two companies also pledged to collaborate on technology issues in
the
future.
The settlement caps years of backbiting between Microsoft and
RealNetworks,
whose chief executive Rob Glaser is a former Microsoft executive.
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