Magazine

Table: Real Headaches


RealNetworks is the leading provider of software for audio and video delivery via the Net, with 215 million consumers signed on and more than 400,000 streaming-media computers within companies.

THE CHALLENGE: SLACKENING DEMAND

His dot-com customers are failing, and old-line media companies are cutting back. Real's first-half software sales slid 15%.

GLASER'S STRATEGY

He hopes to ride out the slowdown with $341 million in cash. When demand returns, he aims to be top dog.

THE PROSPECTS

Solid. Glaser is making a long-term bet. With his deep pockets and market-leading technology, Real is positioned well.

THE CHALLENGE: MICROSOFT

The software giant includes its own media software with each copy of Windows. And it's catching up, technology-wise.

GLASER'S STRATEGY

Real (RNWK) has deals with five of the top seven computer makers to include its software on their machines. Plus, AOL (AOL) uses the technology.

THE PROSPECTS

Holding on. Real's player is ubiquitous. But as long as Microsoft's (MSFT) monopoly is unchecked, Real will strain to stay ahead.

THE CHALLENGE: SHRINKING AD DOLLARS

The Web ad business is bleak. Like that of most other Web powers, Real's ad revenue has tanked, falling more than 60% last quarter.

GLASER'S STRATEGY

He's relying less on banner ads. Instead, he's creating new formats, gussied up with audio and video, hoping advertisers will pay more.

THE PROSPECTS

Dicey. No matter what kind of ads he crafts, budgets for online ad buying are weak, and that won't change soon.

THE CHALLENGE: NEW BUSINESSES

With revenues tanking and facing pressure from Microsoft, Glaser must find new businesses and sources of revenue to keep growing.

GLASER'S STRATEGY

He's launching subscription services such as GoldPass, which lets people tune into baseball games, and MusicNet, an online music service.

THE PROSPECTS

Good Start. GoldPass is starting well, with 300,000 subscribers, but nobody knows if consumers will pay for music.


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