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RealNetworks Acquires Xing Technologies for $75M, Strengthening its MP3 Capabilities

Strategic Insights

— 1 min read

RealNetworks Inc, a leader in digital media software and services, has made its second strategic deal in two days, acquiring MP3 pioneer Xing Technologies Inc for $75m of its highly-valued stock. This acquisition marks a significant step in RealNetworks' efforts to strengthen its MP3 capabilities and provide secure music download formats to the market. The move follows the company's announcement of an agreement with IBM Corp to develop software in compliance with IBM's Electronic Music Management System (EMMS), a secure music download format being tested by major record companies.

Key Takeaways:

  • RealNetworks acquired Xing Technologies Inc for $75m of its highly-valued stock.
  • Xing is a developer of MP3 and other MPEG-related encoders, decoders, and players, and has been around since 1990.
  • The acquisition includes about 12 of Xing's 22 employees, who will become RealNetworks staff under the terms of the deal.
  • The new shares will amount to about 1% of RealNetworks' total shares outstanding, and the acquisition will be accounted for as a pooling of interests.
  • RealNetworks claims that MP3 does not provide any copyright protection for the music, and aims to address this with the acquisition.
  • The company plans to integrate Xing's technology into its current G2 player, which has 35 million users, to support formats beyond MP3.
  • RealNetworks' CEO, Rob Glaser, is skeptical of Microsoft's attempts to develop a secure music delivery service in the shape of its MS Audio format.
  • Glaser predicts that Microsoft will not be successful in its attempts to define formats on its own terms to the exclusion of others.

Statistics:

  • RealNetworks acquired Xing Technologies Inc for $75m of its valued stock.
  • Xing has 22 employees, 12 of which will become RealNetworks staff under the terms of the deal.
  • RealNetworks' G2 player has 35 million users.
  • Xing claims to have developed the first software JPEG, and MPEG audio and video encoders and decoders.

Sources:

  • RealNetworks Inc. "RealNetworks Acquires Xing Technologies for $75M"
  • Xing Technologies Inc. "About Us"

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