SAN FRANCISCO -- The plot has thickened.
In another twist to an increasingly surreal relationship,
officially announced Thursday that
Internet Explorer 5.0 will offer its users one-click access to RealNetworks' growing stable of streaming-media programming.
The announcement contradicts -- and appears to openly defy --
comments made by Microsoft Wednesday that the software colossus is not renewing its rocky relationship with RealNetworks. Microsoft's denials followed a report in
The Wall Street Journal
citing a "renewed collaboration" with RealNetworks.
A source close to RealNetworks says Microsoft denied the relationship in an attempt to control the spin on this latest partnership between the two companies.
The new version of Microsoft's Web browser, nicknamed IE 5, will enable users of the browser to access RealNetworks' content through a "RealGuide Explorer Bar." The bar will not be directly integrated into the browser, but rather will be available for free on the
Web site by downloading the new
RealPlayer G2 Update 1
, or by using the auto-update feature built into the
, RealNetworks' streaming-media player.
The RealGuide, which was revamped on March 15, acts as a sort of portal for streaming-media content. The RealGuide features links to the day's top live streaming events, as well as programming in different categories such as news, sports and money, among others.
The access to RealNetworks content is hardly a default feature on IE 5. Once the RealGuide Explorer Bar is installed, users will have to configure their browsers in a multistep process in order to integrate it into IE 5, says Rob Grady, a product manager for the RealPlayer.
RealNetworks is working on automating the integration process to make it easier for consumers to access RealNetworks content in future versions of IE 5. "That functionality is not exposed in IE 5 now," says Grady. "Third-party developers can't have it install automatically. But we're confident that
Microsoft will continue to improve it."
While Microsoft is gaining access to streaming content, the deal secures RealNetworks a new and powerful distribution channel. Asked if any money was changing hands in the alliance, RealNetworks spokesman Jay Wompel declined to comment on the specifics of the deal.
Microsoft officials refused to discuss the integration of IE 5 and RealNetworks content.
"I'm not comfortable commenting on the release of IE 5," says Tom Pilla, a spokesman for Microsoft. A spokeswoman from
, a Portland, Ore.-based public relations agency that represents Microsoft, declined to comment on the existence of any deal or relationship with RealNetworks.
However, a Microsoft executive is quoted in RealNetworks' Thursday announcement.
"We are pleased to see RealNetworks take advantage of the Explorer Bar feature of Internet Explorer 5," David Cole, vice president of the Web Client and Consumer Experience Division at Microsoft, is quoted as saying. "The RealGuide Explorer Bar will enable a broad range of streaming media programming choices for Internet Explorer 5 customers."
The stark disagreement over the terms -- or even the mere existence -- of the deal between Microsoft and RealNetworks marks the latest chapter in a stormy relationship between the two companies, which have been battling over the streaming-media software market. RealNetworks, founded by ex-Microsoft executive Rob Glaser, controls about 85% of the streaming-software market. Microsoft, which has developed its own streaming software, bought a 10% equity stake in RealNetworks early on.
But last November, Microsoft terminated the relationship, saying it would sell its stake in the company. RealNetworks CFO Paul Bialek said that over the past few months Microsoft has sold its 3.3 million shares of RealNetworks stock back into the market, increasing the company's float to 9 million shares.