WebTV gets Real

NEWS WebTV, the Internet television service owned by Microsoft, has signed up RealNetworks to provide it with its media streaming software. Under the agreement, RealNetworks will provide WebTV with RealAudio G2 software and will develop a version of its RealPlayer video software for the Windows CE operating system. WebTV president, Bruce Leak said the deal is important for the firm to give its subscribers the best possible experience of the Internet. RealNetworks and Microsoft are bitter rivals in the Web streaming arena, with the software giant producing its own Media Player software to compete with RealPlayer. Vaughn Halyard, VP of global entertainment and media strategies at analyst house, Meta Group, said the deal is an example of once sworn enemies joining forces. He said: "Real's software has a large mindshare, and Microsoft would prefer a marriage of convenience [rather than] going to war over this issue." But Halyard said the move "won't bring new subscribers in", and doubted whether it will help WebTV hold off massive competition from cable and satellite operators also bringing the Net to the television set. Jupiter Communications analyst, Noah Yasskin, said the deal makes sense, with Microsoft using a typical strategy of being both partner and competitor. But Yasskin also sees a bleak future for WebTV; with just 800,000 subscribers, he said it has already lost the fight to bring the Internet over the TV. "The revolution has not happened for them," he concluded. RealNetworks shares increased in value by a quarter on the announcement, reaching just under $90 on Nasdaq.