RealNetworks is covering all its bases in the digital audio market.
The company said on Tuesday it agreed to acquire MP3 software developer Xing Technology in a US$75 million stock deal.
"Xing has world-class MP3 technology that's been used to encode the vast majority of consumer MP3 content," said Rob Glaser, RealNetworks' chief executive. "There's a huge, legal market for downloadable songs in the MP3 format."
Users love the MP3 format because it lets almost any PC play back near-CD quality music. But the format is also used for music piracy, which has the recording industry upset. Record companies are trying to create a specification for music downloads through its Secure Digital Music Initiative.
Read ongoing MP3 coverage- - - - - -
Glaser provided few details about the company's plans to incorporate Xing technology into its G2 media player.
Xing licenses its audio and video compression technology to companies like Diamond Multimedia, which makes the Rio MP3 player, Creative Labs, which makes the Nomad MP3 player, and MusicMatch, which makes MP3 encoding and player software.
"Clearly this announcement helps validate MP3 as a powerful, legitimate format," said Dennis Mudd, president of MusicMatch, a software development company.
On Monday, RealNetworks said it would team with IBM to produce a secure way to deliver online music. Real will provide its player as a plug in for IBM's technology pitch to SDMI.
Glaser also declined to say how Xing technology might affect the company's deal with IBM, although he said RealNetworks wants to encompass music in both the secure arena and in the unsigned band category.
"Real has reacted to the fact that MP3 and other formats and players will co-exist or supersede Real's proprietary technologies," said Robert Lord, spokesman for Nullsoft, which makes the de facto standard Winamp MP3 player, in an email.
The acquisition coincided with scheduled release of MS Audio 4.0 by rival Microsoft. Microsoft is pitching its product as a replacement for MP3 with anti-piracy features.
Glaser declined to comment on competition from Microsoft, but said, "If someone is trying to cram an alternative to SDMI down the throats of major labels, they are not going to be successful. If someone is trying to cram an alternative to MP3 down the throats of [the MP3 community], I don�t think they are going to be successful."
Microsoft and Real are still on catty terms, according to a posting on Xing's Web site with the headline, "The Empire Strikes Back!" and the paragraph, "Xing CEO Hassan Miah was dis-invited to the Microsoft Audisee launch party.... Apparently reacting to the news ... Hassan was informed that his attendance would be too awkward."
