Beating their swords into market shares.

After years of bickering, Microsoft has decided to pay a lot of money to climb into the sack with RealNetworks. The longtime rivals announced Tuesday a settlement of Real's antitrust complaints against Redmond in the U.S. and Europe. According to News.com, Microsoft will pay $460 million in cash to RealNetworks to settle antitrust claims. It will also pay $301 million in cash to support Real's music and games efforts and will promote Real's Rhapsody subscription music service on MSN. Microsoft can earn credits toward that $301 million by signing up subscribers via MSN. Added Bill Gates, "We've agreed, in the Windows front, to make our platform as effective as possible for Real," including, among other things, making the companies' digital rights management technologies interoperable.

The agreement clears the table of Microsoft's last major antitrust lawsuit in this country. The suit was filed by Real back in December 2003 and accused Microsoft of forcing its Windows Media Player on users, to the detriment of Real's player. The Real deal is the latest in a string of courtroom entanglements that Microsoft has paid its way out of in the past few years. In July, the company reached an $850 million deal with IBM. That followed a $1.6 billion settlement with Sun Microsystems in 2004 and a $750 million truce with America Online in 2003.

In an anticipatory note to clients, analyst Mike Latimore at Raymond James & Associates, said, "The promotional element of a potential settlement would be a boost for RealNetworks' online media services, and the additional cash would support further acquisitions in Real's target markets."

[Source: By John Murrell, Good Morning Silicom Valley, CA, 11oct05]

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