By News.com staff
April 14, 2000, 4:00 a.m. PT
Within the high-tech industry, it is known as "getting Netscaped."
The damning label is applied to companies that have dared to cross swords with Microsoft since its well-documented campaign to take the browser business away from Netscape Communications. And many industry veterans say RealNetworks risks suffering a similar fate in multimedia, a situation exacerbated by a particularly acrimonious history with its arch enemy.
This week, RealNetworks marks the five-year anniversary of its breakthrough RealAudio software for Web streaming, a technology that was key to the Internet's multimedia expansion. Coincidentally, the company is facing perhaps the most difficult challenges in its short history as it confronts unprecedented competition from a software empire just a few miles away from RealNetworks' Seattle headquarters.
Those familiar with both companies say a licensing deal signed last month with Microsoft is an ominous sign for RealNetworks' dominance in streaming. At present, RealNetworks says it has no plans for wide adoption of Windows formats, but the broad agreement leaves the door open to possible use of Microsoft's technology in all of the streaming company's products.
The move may reflect a grudging admission that Microsoft's inroads are deeper than RealNetworks has publicly acknowledged. The war for control of multimedia technologies is far from over, but the outlines of a familiar pattern are beginning to emerge: one that recalls the divide-and-conquer strategy employed by Microsoft for the past two decades.
"It's very much like the early days of Netscape and Internet Explorer," said David Goldberg, chief executive of music site Launch, alluding to the infamous battle of Web browsers that Microsoft eventually won. "I think there are a lot of parallels."
It is a particularly poignant struggle for Rob Glaser, the man who founded RealNetworks after spending years as a Microsoft executive. Knowing well the ways of the Windows empire, he appears to be hedging his bets with an exit strategy that would shift his company from software to services. The question is whether this is a natural evolution of his business or whether Glaser's hand is being forced by his former mentor, Bill Gates.
In an interview with CNET News.com, Glaser unequivocally denied that competition with Microsoft alone is driving his company, insisting that RealNetworks' products are far superior. He also rejected comparisons to Netscape, saying his company is more akin to America Online, eBay, Yahoo or other "networks" that have grown beyond their original mission.
Either way, the conflict is a study in Microsoft's efforts to expand as the Justice Department attempts to erect boundaries around it. The company has been investigated once before for its actions in the streaming market, and last week's ruling in its federal antitrust case may pose new challenges in its drive to unseat RealNetworks.
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