Microsoft and Real Networks Settle Lawsuit, Collaborate on Digital Music

Today, mightly Goliath finally gave in to pesky little David, who’s been knawing at its ankles for some time with an anti-trust lawsuit charging Microsoft with anit-competitive practices in using its dominance in PC operating system software to impact Real Networks efforts to sell their streaming software.

The settlement, worth $761 Million is broken up into a $460 million cash payment to resolve the suit and another $301 million in cash as well as 18 months support services to assist RealNetworks’ product development, distribution and promotional activities.

Microsoft will also give long-term access to Windows Media player technologies to Real Networks and will push people to subscribe to Real’s Rhapsody download service from various points on the MSN web portal.

Real Networks stock rose 34% to $7.70 while Microsoft’s stock lost 5 cents to $24.41.

Brad Hill of covered the press conference and quotes Bill Gates and Robe Glaser on his weblog. You can also find more information on the deal at

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