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RealNetworks Releases Source Code

October 29, 2002

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SEATTLE (AP) _ Microsoft Corp. has billions of dollars working to its advantage, but crosstown rival RealNetworks is hoping to line up the rest of the world on its side.

RealNetworks on Tuesday released most of the secret blueprints, or ``source code,″ to its software that allows computer users to play audio and video over the Internet. It planned to similarly release the source code for its server and encoding software in December.

By sharing the code with thousands of developers, the company believes it can more quickly and more effectively spread adoption of its software _ tailored for scores of different computers, wireless phones and handheld devices.

Still, the Seattle-based company is keeping other parts of its source code secret, including the blueprints for such features as burning compact discs.

The release is part of RealNetworks’ new ``Helix″ strategy, announced in July. The company is the latest convert to the so-called ``open source″ software movement of sharing software blueprints. The idea is that an assortment of programming talent will improve and build upon existing technology.

That’s a starkly different strategy than Microsoft follows. The Redmond-based software giant closely guards its source code and considers such open-source software as Linux operating systems and server programming as significant competitive threats.

RealNetworks now has 300 million users of its media-playing software, mostly on personal computers. It wants to reach 1 billion users in five years, on everything from cell phones to handhelds, chief executive Rob Glaser said. Not counting media software embedded in browsers, RealNetworks has a slight edge over Microsoft, with about 31 million home users in June, compared with 30.1 million for Microsoft players, according to the research firm comScore Media Metrix.

``(There’s) a very, very dramatic kind of opportunity,″ he said. ``The media industry is not going to be a subset of the PC industry.″

Since the announcement, more than 2,000 developers have signed on to the RealNetworks Helix Web site to participate, the company said. RealNetworks is offering two licenses _ one for enthusiasts who must agree to make their creations available for free to anyone in the community and another for companies who must pay a royalty to RealNetworks for any commercial programs built off the source code.

Microsoft said RealNetworks’ Helix initiative is a ploy.

``Real is using open source theatrics to try to change the perception among the developer community that they are hard to work with and too restrictive in their licensing terms,″ said Michael Aldridge, lead product manager of Microsoft’s Windows Digital Media.

RealNetworks needed to make such a strategic change in order to keep pace with the explosion of interest in digital media, said Richard Doherty, director of research firm The Envisioneering Group in Seaford, N.Y.

``No one can handle it all,″ he said. ``So the only way RealNetworks could expand is to give up some of the magic through open source.″

Regardless of whether it’s an offensive or defensive move, it helps differentiate RealNetworks from Microsoft in a race that has grown too close to call, said Max Flisi, an analyst with International Data Corp. ``They wanted to do something that was not just `let’s release the next version and claim it is twice as fast.‴

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On the Net:

http://www.realnetworks.com

http://www.microsoft.com

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