RealNetworks to acquire Vivo

Streaming media software maker RealNetworks (RNWK) today said it plans to acquire streaming media creation tools maker Vivo Software, in a move intended to broaden its streaming media product line.

Under the agreement, all outstanding shares of Vivo will be exchanged for 1.1 million new RealNetworks shares, which are valued at $17.1 million based on current market value. The companies said they expect the deal to close within 60 days.

Analysts said they weren?t surprised by RealNetworks? move to buy Vivo in order to consolidate its position in the streaming media creation tools market.

"They were a little weak on the authoring tools side," said Rob Enderle, a senior analyst with Giga Information Group. "This will give them the authoring tools and help them provide more of a complete [package]."

The purchase is an example of the continuing consolidation in the streaming-media market place, analysts said.

Microsoft has been particularly active in the streaming area. The company last year invested in RealNetworks and VDONet, and acquired streaming company VXtreme.

In a statement today, RealNetworks founder and CEO Rob Glaser said the streaming media market is "growing at a phenomenal rate. Having tools that make it easier to create and publish streaming media content is crucial to further growth. RealNetworks is committed to both supporting Vivo?s current Web site and customer bases and providing integration and upgrade paths into the rest of RealNetworks product lines," he added.

Based in Seattle, Washington, RealNetworks develops software and services designed to allow users to send and receive audio, video, and other multimedia using the Web.

Waltham, Massachusetts-based Vivo makes a family of tools called VivoActive, which enable Web developers to create streaming digital media, including video and audio, over corporate intranets and the Internet.