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%.
He hopes to ride out the slowdown with $341 million in cash. When demand returns, he aims to be top dog.
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.
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.
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.
He's relying less on banner ads. Instead, he's creating new formats, gussied up with audio and video, hoping advertisers will pay more.
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.
He's launching subscription services such as GoldPass, which lets people tune into baseball games, and MusicNet, an online music service.
Good Start. GoldPass is starting well, with 300,000 subscribers, but nobody knows if consumers will pay for music.