RealNetworksApril 15th, 2000

RealNetworksApril 15th, 2000

Chantal Yearwood

Luiz Gustavo Saito

Makoto Yokoo

Paulo Passoni

3

Our message is…

“RealNetworks should combine its technological

expertise and content aggregation power with

strategic alliances to enhance the ecosystem

model and consolidate its presence in the growing

streaming media worldwide”

5

Agenda

What business are we in?What business are we in?1

Who are the competitors?Who are the competitors?2

What foreign markets to enter? How?What foreign markets to enter? How?3

What Human and Financial Resources will be needed?What Human and Financial Resources will be needed?4

What’s in the future of this business?What’s in the future of this business?5

Q & AQ & A6

6

Agenda

What business are we in?What business are we in?1

Who are the competitors?Who are the competitors?2

What foreign markets to enter? How?What foreign markets to enter? How?3

What Human and Financial Resources will be needed?What Human and Financial Resources will be needed?4

What’s in the future of this business?What’s in the future of this business?5

Q & AQ & A6

7

The Streaming ChainThe Streaming Chain

Broadband

56k

28-36K

14K

Source: Nielsen/NetRatings

3.9

5.4

7

8.8

1999 2000 2001 2002

CAGR:31%

US

$ bn

Source: IDC

Media Media Companies Companies

ServersServers

Streaming Streaming server server

softwaresoftware

Internet infrastructure

Streams & Advertising

Client softwareand/or

Organizer

End Consumer

Content Content producing producing

will result in will result in conflict with conflict with

media media companiescompanies

Microsoft Microsoft Platform WarPlatform War

Linux, SunLinux, Sun

Rich-Media trend

Internet will mimic real

life

Different Different music music

formats formats

Platform Platform warwar

8

Ecosystem: Ecosystem: highly leveraged by allianceshighly leveraged by alliances

Consumer Software

Content aggregation

Advertising

Narrow and broadband software infrastructure

Real Broadcast Network Real Broadcast Network deal with DoubleClick. deal with DoubleClick. Examples:Examples: Buick, Gap, Buick, Gap,

Intel, and 800.comIntel, and 800.com

•Music: Universal Music Group, BMG and Sony•Aggregators: Yahoo•Content providers: CNN, ESPN, ABC, FoxNews and AOL•E-commerce: amazon.com, Cdnow.com, NetRadio.com and Spinner.com

•Infrastructure AT&T, Exite@Home, Cable and Wireless, Enron, Deutsche Telekom, GTE and Sprint•Application Tools: 150 soft vendors such as Intel, SGI, Sun, Lotus and Macromedia

Non-proprietary Juke box

vs. proprietary RealPlayer technology

Non-proprietary Juke box

vs. proprietary RealPlayer technology

9

Core Business:Core Business: Streaming media Catalyst Streaming media Catalyst

Software/Streaming technology

development to the end

consumer

Content aggregation,

NOT creation

Advertising revenues as a result of increasing

traffic

The Ecosystem concept is key to The Ecosystem concept is key to the the Business ModelBusiness Model

• 350k hours of streaming media creation per week (100k 2 yrs ago)

• 85% of available streaming media files are in RN`s format

• 100 million unique users

• Technology Leader: several Awards as the best product

Business assets:

• Dynamic management that understands this market

• Streaming media is critical to the WWW

10

RealNetworks RealNetworks Dilemma: Dilemma: WWhich business model?hich business model?

Website traffic revenues through content aggregation and tech innovations to end consumers (JukeBox)

Software Fees

Microsoft`s cash and networking power may result in a lost battle for technology standard

Real.com is more vibrant than Broadcast.com

Yahoo core business is content aggregation

Leverage on Real`s strategic alliances, becoming the major hub for streaming tech and content.

11

Agenda

What business are we in?What business are we in?1

Who are the competitors?Who are the competitors?2

What foreign markets to enter? How?What foreign markets to enter? How?3

What Human and Financial Resources will be needed?What Human and Financial Resources will be needed?4

What’s in the future of this business?What’s in the future of this business?5

Q & AQ & A6

12

Competition Overview

PlayersPlayers ThreatsThreatsHow to How to

overcome…overcome…

Software: RealPlayer & RealJukeBox

Content Aggregation: Real Guide

Content Producer: Take5

•RealNetworks

•Microsoft

•Apple

Microsoft is a very strong competitor with monopoly position in PC OSs

RealNetworks can capitalize in its Ecosystem and key partnerships

•RealNetworks (13th)

•Yahoo Broadcast

•MediaPlayer.com (42nd)

•RealNetworks

•Large bricks-and-mortar media companies

Yahoo internet reach can Leverage its streaming aggregation business

Continue to deliver a more vibrant product worldwide

Media Companies eminent conflict

Turn Take5 into a content hub fed by third parties

13

Agenda

What business are we in?What business are we in?1

Who are the competitors?Who are the competitors?2

What foreign markets to enter? How?What foreign markets to enter? How?3

What Human and Financial Resources will be needed?What Human and Financial Resources will be needed?4

What’s in the future of this business?What’s in the future of this business?5

Q & AQ & A6

14

Choosing Target Markets

Decision criteria:

• Demographic and Economic information– GDP per capita– Total population– Telephone Penetration

• Internet current user base (1999)

• Internet projected user base for 2003

• Political Environment

15

Demographic & Economic Data

GDP (US$ Bi)

GDP per capta PopulationTelephone

PenetrationTelephone

Penetration (5yrs)Annual Growth

Total Growth in 5yrs

Index

Japan 4,079,880 32,380 126.0 51% 56% 1.010 1.05 2,178 Germany 2,119,700 25,850 82.0 54% 57% 1.027 1.14 1,299 France 1,471,460 24,940 59.0 59% 62% 1.030 1.16 1,012 UK 1,262,600 21,400 59.0 50% 53% 1.026 1.14 718 Italy 1,134,000 20,250 56.0 46% 50% 1.015 1.08 558 Sweden 227,840 25,600 8.9 146% 146% 1.029 1.15 384 Netherlands 391,208 24,760 15.8 53% 56% 1.037 1.20 249 Switzerland 288,576 40,080 7.2 72% 76% 1.030 1.16 242 Australia 379,610 20,300 18.7 47% 48% 1.045 1.25 220 Spain 546,000 14,000 39.0 32% 40% 1.035 1.19 210 Korea 363,400 7,900 46.0 36% 51% 1.025 1.13 148 China 934,500 750 1,246.0 8% 30% 1.078 1.46 115 Norway 151,052 34,330 4.4 55% 59% 1.024 1.13 93 Finland 125,372 24,110 5.2 48% 54% 1.051 1.28 77 Brazil 781,470 4,570 171.0 8% 28% 1.030 1.16 76 Russia 335,800 2,300 146.0 16% 30% 1.020 1.10 60 Mexico 397,000 3,970 100.0 12% 28% 1.048 1.26 60 Argentina 329,199 8,970 36.7 13% 36% 1.043 1.23 51 Singapore 105,000 30,000 3.5 40% 50% 1.020 1.10 46 NewZealand 53,802 14,700 3.7 46% 48% 1.020 1.10 28 Chile 71,669 4,810 14.9 10% 28% 1.035 1.19 9 India 430,000 430 1,000.0 1% 10% 1.054 1.30 7 Thailand 132,000 2,200 60.0 2% 10% 1.020 1.10 2

USA 8,009,820 29,340 273.0 67% 70% 1.039 1.21 6,466

Source: CIA (1999)

16

Demographic & Economic Data

Index

-

500

1,000

1,500

2,000

2,500

Japa

n

Ger

man

y

Fran

ce UK

Italy

Sw

eden

Net

herla

nds

Sw

itzer

land

Aus

tral

ia

Spa

in

Kor

ea

Chi

na

Nor

way

Finl

and

Bra

zil

Rus

sia

Mex

ico

Arg

entin

a

Sin

gapo

re

New

Zea

land

Chi

le

Indi

a

Thai

land

Index=(GDP*GDP growth 5yr*Telephone Penetration)/1,000

17

Internet Users (in millions)

1,999 2,000 2,001 2,002 2,003 2004 2005 SourceWorld 300 450 560 670 780 890 1,000 Angus Reid GroupWestern Europe 107 134 161 188 215 Forrester ReserchAsia-Pacific 22 34 54 75 95 374 IDCLatin America 9 13 18 24 30 IDC

1,999 2,000 2,001 2,002 2,003 2,004 2,005 USA 110 132 158 190 228 232.66 237.31 Computer Industry AlmanacJapan 20 24 29 35 41 Japanese Ministry of Posts & Telco.Canada 13 16 19 22 27 Computer Industry AlmanacUK 13 16 20 23 26 Germany 12 16 20 22 24 32 GFKFrance 9 12 14 17 19 BetweenItaly 9 11 14 16 18 BetweenAustralia 7 7 9 11 14 Computer Industry AlmanacKorea 6 6 9 11 15 Computer Industry AlmanacRussia 5 8 10 12 14 Monitoring.ruSweden 5 6 6.7 7.3 8 Computer Industry AlmanacChina 4 9 15.13 26 44 74 126 China Internet Netw. Info. Center, StrategisBrazil 4 5 8 10 12 IDCSpain 4 4 5 6 7 Computer Industry AlmanacMexico 2 3 4 5 6 IDCNorway 2 2.1 2.5 2.9 3 CyberSc@nSingapore 1 2 2.1 2.5 3 Angus Reid GroupArgentina 0.9 1.3 1.8 2.4 3.0 IDCChile 0.3 0.4 0.5 0.7 0.9 IDCIndia 0.2 1 3 6 8 IDC

Assumptions: 1) USA will grow at 20% annual rate until 2003 (Goldman Sachs estimate)2) Canada will grow at the same rate as the USA3) All Western European countries will grow at the same rate4) All Latin America countries will grow at the same rate

= information not available

18

Internet Users (in millions)

Japa

n

Can

ada

UK

Ger

man

y

Fra

nce

Italy

Aus

tral

ia

Kor

ea

Rus

sia

Sw

eden

Chi

na

Bra

zil

Spa

in

Mex

ico

Nor

way

Sin

gapo

re

Arg

entin

a

Chi

le

Indi

a

41

27 2624

19 18

14 1514

8

44

12

7 6

3 3 3.0 0.9

8

20

13 1312

9 97

6 5 54 4 4

2 2 1 0.9 0.3 0.2-

5

10

15

20

25

30

35

40

45

Mill

ion

s o

f U

se

rs

1,999

2,003

19

Primary Target Markets

ChinaChina = Fastest growth in the world, 2nd largest market by 2003

JapanJapan = Huge market with high disposable income

UK, France, Germany & ItalyUK, France, Germany & Italy = Fast growth, relatively simple implementation and high disposable income

20

China

• Demographics (source: Strategis Group)

– High level of education among target audience• 35% college degree, 45% university degree

– Higher than average income– Dominance of single males

• 71% of internet users are males• 69% of males are singles

• Short-term content aggregation strategy:– Focus on this audience, providing i.e.: sports, news, career

orientation

• Political Environment– Xenophobic, but willing to receive foreign investments (paradox)

• Entry strategy:Entry strategy:– Increase ties with China.com and other local content providersIncrease ties with China.com and other local content providers– Look for local partners for sales, content aggregation and customer Look for local partners for sales, content aggregation and customer

support support both for political, cultural and economic reasons both for political, cultural and economic reasons

21

Agenda

What business are we in?What business are we in?1

Who are the competitors?Who are the competitors?2

What foreign markets to enter? How?What foreign markets to enter? How?3

What Human and Financial Resources will be needed?What Human and Financial Resources will be needed?4

What’s in the future of this business?What’s in the future of this business?5

Q & AQ & A6

22

What’s Involved in Localizing Content?

Software

•RealNetworks employs 650 in Seattle•Dynamic Management

Drive to improve the breadth and quality of the products and services it

offers in order to provide a durable platform for growth in international

markets

Content

US: Localization StrategyStaff: 12 led by Webster

Asia Manager Europe ManagerStrategic Alliance

StrategicAlliances

Editor

Operator

China

Improve Partnerships

Japan

Editor

Operator

UK

Editor

Operator

German

Editor

Operator

France

Editor

Operator

Italy

Corp. Sales

Corp. Sales Corp. Sales Corp. Sales Corp. Sales

23

Increasing International Revenues result in positive cash flows….

… the idea is that this business model is scalable.

Revenues vs. Costs

35,31047,711

58,610 65,33655,778

93,707

136,656

157,154

2,000 2001 2002 2003

In U

S$

000

Intl COSTS Intl REVENUES

42%

23%

CAGR

24

Agenda

What business are we in?What business are we in?1

Who are the competitors?Who are the competitors?2

What foreign markets to enter? How?What foreign markets to enter? How?3

What Human and Financial Resources will be needed?What Human and Financial Resources will be needed?4

What’s in the future of this business?What’s in the future of this business?5

Q & AQ & A6

25

RealNetworks’ Business PortfolioRealNetworks’ Business Portfolio

Cash Cow

Market share to largest competitor

Potential Growth

Software fees

(Client/Server)

Advertising through content

aggregation

E-Commerce

Dog

?Star

Services

Wireless & Handhelds

26

Key Drivers in the Streaming IndustryKey Drivers in the Streaming Industry

Increasing Broadband PenetrationIncreasing Broadband Penetration

Provide the consumer a Provide the consumer a rrichich media experiencemedia experience

Increasing Digital Music marketIncreasing Digital Music market

Advertising RevenuesAdvertising Revenues

Music Industry different patternsMusic Industry different patterns

Internet will Mimic real life Internet will Mimic real life (1)(1)

M&A activity (Stock is Currency!!!)M&A activity (Stock is Currency!!!)

(1) Mary Meeker, Research Analyst

Consumer Expectation

Technology

Revenue Sources

New tech incorporation

Wireless and Handheld enableWireless and Handheld enable

27

Opportunities for the Future

WirelessA revolution is approaching:Internet enabled cell phones will soon be ubiquitousUnprecedent opportunity for exploring streaming technologies:

Voice over IP in cell phones

WirelessA revolution is approaching:Internet enabled cell phones will soon be ubiquitousUnprecedent opportunity for exploring streaming technologies:

Voice over IP in cell phones

HandheldsHandhelds will eventually become multimedia devicesMicrosoft is tied to the Windows CE plataformThe market leader, Palm, will need a partnerRealnetworks is uniquelly positioned to provide multimedia techology for this market

HandheldsHandhelds will eventually become multimedia devicesMicrosoft is tied to the Windows CE plataformThe market leader, Palm, will need a partnerRealNetworks is uniquelly positioned to provide multimedia techology for this market

28

Agenda

What business are we in?What business are we in?1

Who are the competitors?Who are the competitors?2

What foreign markets to enter? How?What foreign markets to enter? How?3

What Human and Financial Resources will be needed?What Human and Financial Resources will be needed?4

What’s in the future of this business?What’s in the future of this business?5

Q & AQ & A6

29

APPENDICES

30

Who are our competitors today?

Competitive atribute: RealNetworks Microsoft Apple

Current client base

Capacity to create new technologies

Cash to back aggressive campaigns

Ability to build alliances

Access to different server platforms

Brand recognition

International presence

Bundle capability

Overall Position

Very weakVery strong

Competitive scenario in the Competitive scenario in the Client & ServerClient & Server streaming software market streaming software marketxx

31

•Customers•Advertising

•Internet•Print•Audio•Video

•Info processing and selection

•Raw info gathering

•News & Movies creation

•End Customer

•Decoder and/or organizer

•Streams & Advertising

•Internet Structure

•Streaming software

•Media company servers

Delivery channels:

•End customer•Internet delivering

•Media Company

•News, movies, music & business

Media Value Chain:Media Value Chain:

RealNetworks Value ChainRealNetworks Value Chain::

Delivery Value Chain:Delivery Value Chain:

Rich-Media?Rich-Media?

– AOL

– TCI

– MSN

– PSINET

– Earthlink

– AT&T

– RealNetworks

– Microsoft

– Apple

– RealNetworks

– Microsoft

– Apple

– DoubleClick

– Cisco– Lucent– Nortel– Nokia– Erickson– AT&T– MCI

– Microsoft

– Apple

– RealNet

– AOL/TW

– Disney

– ABC

– NBC

– News Corp

– Dow Jones

– Bloomberg

– ESPN

32

About the Other Countries

Japan, France, UK, Germany & ItalyBuild on existing local structuresLook for partners for sales, content aggregation and customer support

Switzerland, Scandinavian Countries, Netherlands, Singapore•High incomes and high Internet penetration, but small populations (remember that content aggregation costs are not necessarily lower because of smaller population)

Latin America, Spain, Korea, Russia•High Internet growth and sufficient income per capta, however they are not as promising as the chosen target markets

India, Thailand, Philippines

•Despite fast Internet growth, infrastructure and income are still restrictions in order to achieve critical mass chart

33

Rationale behind Partnerships

BenefitsBenefits

• Partners understand the local marketsPartners understand the local markets

• They help to avoid or minimize political They help to avoid or minimize political issuesissues

• RealNetworks may share its costs with themRealNetworks may share its costs with them

34

Measuring the return of Guide and Take5:

Ways of measuring return on an investment:

CFROI ROIC

ROI

Conceptually better, but unfeasible

Software License fees generated by

RealGuide and Take5

Advertising revenues

Cost of Advertising Revenues Total Revenues

SG&A

Advertising Costs

*

Measured by a software that tracks consumer surfing in RN`s website

A

A

35

Why RealNetworks won’t become Why RealNetworks won’t become a a Netscape?Netscape?

Proprietary integrated platformProprietary integrated platformRelationships with content providers that block Windows MediaPlayerRelationships with content providers that block Windows MediaPlayer

Strong presence in client platforms & key partnershipsStrong presence in client platforms & key partnerships85% market share and RealPlayer is bundled in most new PCs and several apps85% market share and RealPlayer is bundled in most new PCs and several apps

Strong presence in server platforms & key partnershipsStrong presence in server platforms & key partnershipsRealServer comes bundled in major server oper. systems (Sun, Linux RedHat, etc)RealServer comes bundled in major server oper. systems (Sun, Linux RedHat, etc)

More knowledge in software and portal businessMore knowledge in software and portal businessReal.com Guide Real.com Guide 1313thth vsvs WindowsMedia WindowsMedia 4242ndnd

Positive cPositive cash flowash flow

Network of companies that rely on RealNetworks technologyNetwork of companies that rely on RealNetworks technologyContent creators, software developers, ISPs and streaming professionalsContent creators, software developers, ISPs and streaming professionals

Superior technological systemSuperior technological systemBest Product Awards from several opinion makersBest Product Awards from several opinion makers

36

– Huge User Base (>100mm)Huge User Base (>100mm)

– Superior Technology (Awards)Superior Technology (Awards)

– Flexible product to new stream standardsFlexible product to new stream standards

– Highly leveraged EcosystemHighly leveraged Ecosystem

– First Mover EdgeFirst Mover Edge

– Brand RecognitionBrand Recognition

– Successful International entering (Japanese)Successful International entering (Japanese)

– High Mkt Cap can be used for further acquisitionHigh Mkt Cap can be used for further acquisition

RealNetworks’ StrenghtsRealNetworks’ Strenghts

37

– Content creation causes conflicts with its current partners

– Microsoft:

• War for industry standard

• MSFT can leverage its products through networking and bundling

• Is better positioned for International expansion

• The Company already has handheld software that can be used to adapt Media Player

– Different Audio standards (I.e. MP3)

– Search engines as alternative guides

RealNetworks’ ThreatsRealNetworks’ Threats

38

– International Market is relatively unexplored

– Broadband and new complex streaming tech demand (rich-media)

– Provide and aggregate streaming content

– Develop handheld market

– Important new corporate market (cost reduction opportunity, conference call)

RealNetworks’ OpportunitiesRealNetworks’ Opportunities

39

– No clear definition on core business

– Therefore, lack of focus

– Lack of qualified personnel, specially outside of US

– Lack of knowledge in foreign countries, besides Japan

– No handheld devices software

– Relatively low cash power compared to main competitor

RealNetworks’ WeaknessesRealNetworks’ Weaknesses

40

Forecasted Income StatementForecasted Income Statement

Revenue Breakdown by Region

101167

219 254 29233

5062

7244

7485

1713

22

0

100

200

300

400

500

1999 2000 2001 2002 2003

In U

S$

mm

North America Europe Asia and Other

Revenue Breakdown by Segment

91134

172 195 20226

45

6682 94

44

75

113153

14

0

100

200

300

400

500

1999 2000 2001 2002 2003

In U

S$

mm

Software License Service Revenues Advertising

Operating Cash Flow

(20)

0

20

40

60

80

1999 2000 2001 2002 2003

In U

S$

mm

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

EBITDA EBIT EBITDA Margin

Bottom Line

0

10

20

30

40

50

60

70

1999 2000 2001 2002 2003

In U

S$

mm

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

Net Income Income per share

Increasing Asian Revenues… Increasing Advertisement Revenues…

A cash generating company… Increasing net income…

41

Source: Forrester Research

Digital Music Industry in US$mm

7501,050

2,000

3,500

6,000

1999 2000 2001 2002 2003

CAGR: 68%

World Number of Online People Evolution (in Millions)

0

200

400

600

800

1000

1200

World Asia/Pacific Europe North America

2000 2005E

30%

47%

21%

15%

Source: IDC

Internet Advertising in US$ Billions

0.20.85

1.95

3.9

5.4

7

8.8

10.8

1996 1997 1998 1999 2000 2001 2002 2003

CAGR: 29%Real Network's Market Capitalization since IPO (In US$ Millions)

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Asia will become the largest market… Digital Music is a big business…

Advertising dollars are real…The Company`s Market Cap reflect this awesome potential…

Market DataMarket Data

42INITIALS

– As today

– Give up software (core so far)

– Give up content

– Become a content producer

– Partner with MSFT rivals (Sun)

Alternative Business Models:Alternative Business Models:

– Outsource aggregating

43

How to deal with talent shortage in US and abroad?How to deal with talent shortage in US and abroad?

USSeattle

Concentrate all software localization in SeattleBring language/cultural experts (in which international expansion

is essential) to headquarters

Content Aggregation:Must cater to local needs in both

cataloging and developing proactive aggregationLOCAL EXPERIENCE

Abroad

Promote foreign students recruiting in schools all over America

Hire from software houses that have experience with software localization

44

Ecosystem

Competition in the Server & Client

Value Chain

Becoming Netscape?

RealNetworks`dilemma

Business alternatives

Industry Drivers

RealNetworks`core business

Presentation DirectoryPresentation Directory

RealNetworks` Strengths

RealNetworks` Weaknesses

RealNetworks` Threats

RealNetworks` Opportunities

Forecasted Income Statement

BCG Portfolio Analysis

The Streaming Chain

Market Data Analysis

Competition Overview

Calculating return in Guide and Take5

Our MessageNew Ventures

Talent Problem

Rationale behind partnerships

Other Countries

Summary

International Expansion Investments

Expansion Organization

Choosing Criteria

Demographic&Economic Data

Demographic&Economic Graph

Internet Users Data

Internet Users Graph

Primary Target Markets

China

SWOT Analysis

Foreign Markets

How to enter…

Financials and other

Competition

Industry

Core Business

Get Noticed in Foreign Markets

International Pricing Strategy

Key Success Factors

International Pricing

45

Creative Ways to Get Noticed in Foreign MarketsCreative Ways to Get Noticed in Foreign Markets

Music ConcertsMusic Concerts

Interviews with celebritiesInterviews with celebrities

Religious EventsReligious Events

Make Deals with major Radio and TV StationsMake Deals with major Radio and TV Stations

Alternative advertisements (Malls, Billboards)Alternative advertisements (Malls, Billboards)

Sports BroadcastSports Broadcast

Major Events Coverage:Major Events Coverage:

46

International Pricing Strategy

Server Software:It’s possible to be sold directly to clients at lower prices than from the website.

TradeablesTradeables Non-TradeablesNon-Tradeables

Client Software

Can be downloaded Can be downloaded from any country from any country

websitewebsite

Pricing must be the Pricing must be the same worldwide same worldwide

Pricing may follow regional strategies

AdvertisingServices

Not downloadable, must be treated locally

47

Key Success Factors

AlliancesAlliances

First Mover AdvantageFirst Mover Advantage

Huge Client BaseHuge Client Base

Technology LeadershipTechnology Leadership

•With content providers: increases adoption by end and business users

•With streaming professionals: helps creating an industry support for the product

•With other technology providers: helps creating a standard and increase influence in platform.

•With content providers: increases adoption by end and business users

•With streaming professionals: helps creating an industry support for the product

•With other technology providers: helps creating a standard and increase influence in platform.

Helps create a “de facto” standardHelps create a “de facto” standard

Leverage dominance in the server marketsLeverage dominance in the server markets

Promotes client and server dominance through continuous product improvements

Promotes client and server dominance through continuous product improvements

48

Internet access: Dial-up or Cable?

China: TV penetration 25:1 PC penetration

India: Huge access to cable

WebTV may be very successful there

RealNetworks should make a provisionfor streaming technology over Web enabled appliancesthat access the Internet through cable