Refuting media reports,
denied it is engaging in "renewed collaboration" with
. RealNetworks shares retreated on the news after running up on the report of the collaboration. They were up 8 1/2, or 7.4%, at 123 1/2 after earlier hitting 133 7/8.
"There is no announcement of any deal with RealNetworks," said Tom Pilla, a spokesman for Microsoft. "Nothing has changed in the relationship."
According to the story in today's editions of
The Wall Street Journal
, the new version of Internet Explorer, Microsoft's Web browser, will "enable ... users to connect to Real's newly enhanced directory of sites offering audio and video clips, dubbed RealGuide." That software will be released tomorrow.
The dispute marks the latest chapter in an on again, off again relationship between Microsoft and RealNetworks, which have been warring over the market for streaming media software. RealNetworks makes the
, the leading streaming media player with about 85% of the market. Microsoft has developed its own streaming software, dubbed the
. Microsoft was an initial investor in RealNetworks, buying a 10% equity stake in Real, which was founded by a former Microsoft executive, Rob Glaser. But last November, Microsoft terminated the relationship, saying it would sell its stake in the company.
Investors interpreted this as a sign that Microsoft was back on the warpath. A recent Microsoft investment seemed to support that theory. Last week, Microsoft set a $15 million equity investment in
, which develops technologies for delivering music and other media content via the Internet. The investment gives Microsoft a 10% to 15% stake in Reciprocal, formerly known as Rights Exchange.