Real Audio CEO: Microsoft ruthlessly destroys others

A bitter Rob Glaser, CEO of Real Networks, the maker of Real Audio and RealVideo, took the stand Thursday before a U.S. Senate committee and describedMicrosoft as a company that ruthlessly destroys any and all competition.His testimony, which lasted several hours, described the almost infinitelayers of alleged monopoly abuse that Microsoft employs to gain entry intonew and lucrative markets.

"[Microsoft is committing acts that] unless remedied, will make the computing world less friendly and less useful to customers and will slow down technical innovation significantly," Glaser told the committee.

Glaser worked for Microsoft for ten years, then left to start Real Networksto create streaming audio that works over the Internet. Microsoft, whichrecently took an equity stake in Real Networks (they now own 10% of thecompany), rendered its Real Audio player useless by creating a free playerthat does the same thing.

"Instead of either licensing our new products or peacefully co-existing with us, Microsoft has instead in effect tried to stop our products from being used," he said. "In a number of circumstances where the consumer already had our product, Microsoft's product in effect breaks our product.What Microsoft is doing is wrong, pure and simple. It damages our businessand reputation. It's bad for consumers who depend on the quality and reliability of our products. It serves no positive purpose."

Not coincidentally, it was also revealed today that the U.S. Department ofJustice (DOJ) is investigating Microsoft's abuse of Real Networks and othersimilar companies.

Microsoft, of course, says the allegations are untrue.

"We are disappointed that Mr. Glaser chose a government forum and not the marketplace to compete," said Microsoft spokesman Jim Cullinan. "Microsoftdid not disable RealPlayer. We never heard of this until 24 hours ago. Ourdevelopment team works really hard with RealNetworks to make sure the products work together."

Not according to Real Networks. Bruce Jacobsen, the president and COO ofReal Networks, discussed the problems after the Senate meetings ended.

"We tried to fix this with Microsoft," Jacobsen said. "When we first saw the problem in the beta, we thought maybe it's just a bug. But, though they fixed some minor aspects of the problem, they weren't willing to fix it. We tried to address it very proactively."

Jacobsen says that Microsoft's new Windows Media Player "breaks" the RealAudio player by disabling it without asking the user. Real Networks hasrecently released a new version of its media format called "G2," which isincompatible with the Windows Media Player. So, when the user installs Microsoft's player, which is incompatible with this content, users that click on such a link will receive an error message.

"The Web should work when you click on a link," said Jacobsen. "My mother-in-law gets an obscure error message, she has no idea why it's not working anymore or how to fix it. If you've taken the time to download the G2 player, you don't want it to break on you."

Further harming Real Networks is the fact that the Windows Media Player also breaks links to the RealPlayer Plus, for which RealNetworks charges customers $30. The company is now working on a patch to fix the problem.

"We can write code that detects when Windows Media Player is there and grabback the default setting, but that's not how we think our engineers shouldspend their time," he said.

In the end, this situation may have soured relations between the companiesfor good.

It's too bad a very popular product called RealPlayer is going to be brokenby another popular product called Windows 98," Jacobsen said. "It's a straightforward thing. I just wish that Microsoft would fix it. I wish theywould say, 'For whatever reason, we erred and we'll fix it as soon as we can. I would like to leave it at that, but where is their response that they will fix it?