Microsoft settles differences with RealNetworks

Microsoft settles differences with RealNetworks

World’s largest software company has again used its massive monetary power to convert a competitor into an ally. Microsoft has settled their differences with RealNetworks and the antitrust dispute between Microsoft and RealNetworks is over. Both these companies would now work together to fight the domination of Apple in the digital music market. The companies announced this deal late yesterday and now plans to work on their respective digital music strategies.

As per the settlement deal, Microsoft will pay $460 million in cash to RealNetworks to settle the antitrust claims. They would pay another massive $301 million in cash to RealNetworks for supporting Real’s music and games efforts. In addition to this, Microsoft would also be promoting Real’s Rhapsody subscription music service on MSN. In return, Microsoft gets to earn credits toward that $301 million by signing up subscribers via MSN.

RealNetworks CEO Rob Glaser said in a statement: “Today we’re closing one chapter and opening a new one in our relationship with Microsoft. The legal chapter is being closed with an appropriate and fair outcome that sets the stage for a very productive and collaborative relationship between our companies.” They had sued Microsoft in December 2003 claiming that Microsoft abused their monopoly to restrict how PC makers install competing media players. In addition, they integrated their own Windows Media Player into the Operating System.

This is just another one of the bunch of settlements Microsoft has made in the recent times with their competitors including AOL Time Warner, IBM, Sun Microsystems, Novell and Be. In fact, Microsoft is also said to be considering a deal with AOL to combine the powers of MSN and AOL to take on Yahoo! and Google.

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