Microsoft and RealNetworks Settle Lawsuit, Partner Up

Microsoft settled a lawsuit on Tuesday with RealNetworks, and Apple may have inadvertently played a hand in the deal, according to a vnu network report. Appleis dominance in the digital media market may have pushed the two companies into an agreement.

Microsoft is paying RealNetworks US$761 million that covers both the settlement, and payment for services that RealNetworks will provide to Microsoft. Both companies also announced a partnership where Microsoft will promote RealNetworksi Rhapsody music subscription service and some games on MSNis portal.

Since part of the deal includes RealNetworks dropping out of the European antitrust probe involving Windows Media Player, Microsoft will be in a better position to reach a settlement with the EU. And, the collaboration will put both companies will be in a better position to take on Appleis digital media dominance.

Even still, the combined forces of the two companies doesnit match Appleis music offerings. Neither company has a product on par with the iPod or the iTunes Music Store.