Here's something on RealNetworks. In case anyone cares to know. I've taken the liberty to high light some areas in bold. I think this article further elaborates the point earlier concerning how MS watches others break ground in an area and then moves in to push the the successful ones out.


NYTimes

Musical Chairs With the Big Boys
By STEVE LOHR

Published: March 21, 2004

Is RealNetworks the next Netscape?

Rob Glaser, the founder and chief executive of RealNetworks, a pioneering maker of music-playing software for the Internet, bridles at the notion. "Our situation is very different in some important ways," he said in a lengthy interview last week.

Netscape, of course, was a path breaker in Web-browsing software and Exhibit A in a sweeping government antitrust case that resulted in a stinging legal setback for Microsoft. Yet Netscape soon faded as a force in the industry.

The fate of RealNetworks is a question awaiting an answer. But the similarities between it and Netscape are uncanny, especially now that the European Commission is preparing to rule against Microsoft on Wednesday after a final round of settlement talks collapsed last week.

The commission will order the company to offer a version of its dominant Windows operating system for personal computers without a digital media player, a market in which RealNetworks was the front-runner until Microsoft moved in.

The ruling, if upheld on appeal, may make it easier for RealNetworks to get its software on more personal computers. But it will not undo the damage already done to the company's business.

In many ways, the European case can be seen as a sequel to the American antitrust suit against Microsoft. Netscape was at the center of that case, which Microsoft lost but then settled with the Bush administration in 2001. Some of the names have changed, but the pattern is the same.

In both cases, Microsoft was accused of being a nasty monopolist that bundled new software into Windows, gave it away and engaged in bullying tactics intended to stifle competition by crushing the early leader in an emerging market.

Competing on those terms proved to be near fatal for Netscape, which was eventually acquired and exists today in a forlorn corner of Time Warner. And it has not been any easier for RealNetworks, which has lost money for four straight years - $245 million in red ink.

As if battling Bill Gates were not enough, Mr. Glaser also finds himself pitted against perhaps the second-most-famous computer entrepreneur in the land: Steven P. Jobs of Apple Computer. Apple's iTunes music store has recently overshadowed RealNetworks' Rhapsody as the stellar brand in digital music.

The RealNetworks story has the added theme of former friends turned enemies. Mr. Glaser, 42, worked for a decade at Microsoft, where he became one of Mr. Gates's trusted lieutenants, and a very rich man. He left and founded RealNetworks in 1994, parting on good terms. Microsoft took a 10 percent stake in the start-up, originally called Progressive Networks.

But then Microsoft itself got into the digital media market, and the partners became adversaries. In 1998, Mr. Glaser testified before the Senate against Microsoft, describing what he said were the abusive tactics of his former employer. Later that year, Microsoft announced that it was selling its stake in RealNetworks.

The most recent salvo from RealNetworks came three months ago, when it filed a private antitrust suit against Microsoft, seeking $1 billion in damages. Despite the bitter rivalry, Mr. Glaser maintains that his company is neither defined nor obsessed by its huge competitor and Seattle area neighbor. "This is not some quixotic Ahab-and-the-whale thing," he said.

Mr. Glaser may be protesting too much, but there is a strong case to be made that his company's future will not be just a rerun of the Netscape script. RealNetworks seems to have the quick instincts of a survivor. Its losses are declining sharply, and it has overhauled its business.

For most of its young corporate life, the main business of RealNetworks was software - the software needed to play on a personal computer the music or video received in digital streams over the Internet and the software needed by developers and companies to create and send it.

Particularly in the last year, the company's digital media offerings to consumers - its Rhapsody music service, computer games and streaming video of Nascar races, N.B.A. games and news from CNN and ABC - have grown sharply. Most are sold as subscriptions, at $5 to $10 a month. In 2001, software accounted for roughly 60 percent of RealNetworks' revenue; by the fourth quarter of last year, the software share had fallen to 25 percent. Over the same period, the share of revenue from consumer services more than doubled, to 75 percent.

TODAY, RealNetworks can be thought of as the Internet equivalent of the early cable television networks of decades ago, like MTV or ESPN. And it is much less dependent on software than it was before, and thus less susceptible to being run over by Microsoft. RealNetworks says it will return to profitability in the second half of this year, excluding the legal costs of suing Microsoft, estimated at $3 million a quarter.

Edited by - Indy11 on 3/21/2004 7:11:45 PM

Newly Announced - New Dent in MS' Windows Armor:

From NY Times ... Republication from the Financial Times

HP plans switch to Linux for new PCs
By SCOTT MORRISON, FT

Published: March 25, 2004


Microsoft was dealt a further blow on Wednesday as Hewlett-Packard, the world' largest personal computer maker, said it planned to bundle its PCs globally with the Linux open source operating system later this year.

The surprise decision by HP, which has long sold PCs with Microsoft Windows installed, is a big boost for Linux and could eventually alter the balance of power in the desktop operating system market.

Last week HP said it would install Linux software in PCs destined for Asia.

Roger Kay, analyst at market research group IDC, said: "This potentially opens up the desktop to a more competitive situation. The idea that there was any alternative to Windows on the desktop had been heresy - up until now".

Linux has emerged as the fastest growing operating system for corporate computers, gaining market share against the Unix operating system long dominant in data centres. But Linux has until now had little success in penetrating the desktop market, heavily dominated by Microsoft's Windows operating system.

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

Mr Kay said HP's new Linux PCs would be geared toward employees at call centres and help-desks who only need computers to use internet applications and e-mail, rather than a whole suite of powerful applications available on Windows.

"They don't really need a Swiss army knife. They just need a sharp blade," he said.

HP has said that using Linux software would enable it to reduce the price of its products.

Given the PC industry's razor-thin margins, the lower cost of Linux operating licences could prove the difference between a profit or loss. Carly Fiorina, HP's chief executive, has made boosting the sale of lower-priced PCs her most immediate strategy.

Sun Microsystems, an HP rival, has also aggressively pushed Linux for desktop computers in Asian markets, while NEC, one of Japan's leading mobile phone manufacturers, plans to launch Linux-based mobile phones this year or early next year.

Fight Like Warlord

so every HP laptop will come with a FREE warning letter from Sco! Almost worth getting the cr*ptop for

"Using this product may seriously damage your ribcage due to excessive laughter"

Yes, I heard that HP were planning that a while ago. I'm gald that they are finally taking the first step. I knew that there was a reason that I liked HP!

But will it fair any better than computers that came out with Lindows and sold at Walmart? And is Wine up to the task of running windows based programs?

Michael "Finalday"
In Memory Of WLB

I think the approach is more intelligent in that the primary Linux install objective is the workplace desktop, not the home.

HP / Compaq always had stronger ties to the working desktop anyway so the point would be that a larger base of commercial use Linux would develop.

From there, Linux for the home desktop would be more easily supported as work desktops migrate to the home in laptops, etc. At least, that's my take on it.

Good ole Microsoft ^-^;

I like Real Network, really do, I only hated it after they charge subscription for downloading their software :/

And yeah, I hear ya Indy, wouldn't come to me as a surprise if Mirosoft likes to buly competitors around. But I still think many of their products are great although many aren't. This should force them to be more competitive.

The only thing that worries me about Open Source is that, programmers should be given money for food clothing, etc and the rest you know what. How do they make money doing programming then if they don't charge for their products. Ya it does look good on the resume, it might also open some service industries. But for some reason the idea still unsettles me. It seems counter intuitive, providing much of your services for free and create jobs at same time also.

Also a part of it I feel is also like communism. No offense please, it's just my opinion, but I'm willing to learn if that's the wrong perception. For that reason it exists when there's a tension between say the ruling class and the poor. Right now there're many programmers who don't get a job coz of the economy. It seems to be also why a lot of them are doing these things for free to fill up their time. There's also M$ monopolizing everything so they can't really compete. Now the thing is once M$ fell, won't the free open source programs actually start to more and more comercialized? Sure they look like the generous good guyz. But I think that once fair competition is restored, it'll be good old capitalism from there on.

What's your take I'd like to know.

@Vis,

I hope Linux becomes a huge success. Open source is not an evil thing nor is it a shaky thing. It is not communism because it is voluntary: No one is being forced to work on Linux for no pay. AND no one owns Linux. It is not the property of the State and there are no party cadres living off the toils of the masses.

And, now that IBM and HP and other big computer names are backing Linux, you have contributors to the open source who are NOT doing the work for nothing.

What I cannot predict is whether there will be different flavors of Linux created that are, as to flavor, made proprietary. I.e., IBM Server Linux vs. HP/Compaq Server Linux, etc. There is nothing to stop this from happening. But, I would point out that it would disconnect both IBM and HP from the wealth of talent in the open source pool and deny both of them the ability to have absolutely the best possible code developed and written.

Although this may make it more work for gaming designers, to have to develop for multiple OS platforms, it is not impossible nor impractical. Game developers already make cross-console games... games playable on Xbox, PS/2 and GameCube/GameBoy (and now, all three console makers will be getting their processor chips from IBM). It should not be too difficult for the same to be done for Linux and Windows ... both being ported to x86 CPU instruction sets anyway. It's just that, so far, there is no economic incentive for them to do it because of the overwhelmingly dominant position that Windows maintains.

OK. I am rambling now so I will end it here.

Fight Like Warlord

Edited by - Indy11 on 3/25/2004 8:36:03 PM