Microsoft has decided to sell its 10% stake in RealNetworks after 18 months of squabbling, netting the company a profit but making it look a bit silly in the process.
Microsoft invested $30 million (#18 million) in RealNetworks in July last year, plus the same amount again for a licensing fee. The two companies struck a deal whereby they would collaborate on interoperability of their respective streaming media protocols, and standardise on Microsoft's Advanced Streaming Format (ASF) in their products.
However, in October last year RealNetworks released the first public beta of its RealPlayer 5.0 software, without support for ASF. Relations between the two companies soured further in July this year when RealNetworks CEO Rob Glaser testified before the US Senate judiciary committee that the installation of Microsoft's Media Player software under Windows 95 disabled his company's RealPlayer G2 software, an accusation that later turned out to be unfounded.
RealNetworks has responded to Microsoft's divestiture of shares by saying that its market share is still around 85%, and that it has made bundling deals with Intel, AOL, Netscape and Lotus that should help it remain the market leader.
Microsoft will make a tidy profit from the deal, however. RealNetworks shares were trading at $9 (#5) per share at the time of the investment, and closed after the announcement at nearly $43 (#26).
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