AOL to use RealNetworks for broadband platform

RealNetworks Inc.'s (Nasdaq: RNWK) software will be used throughout America Online, Inc.'s (NYSE: AOL) networks to deliver interactive broadband entertainment, the companies said Thursday.

AOL will deploy RealSystem 8, and AOL 6.0, due out later this year, will use RealPlayer streaming media technology.

RealNetworks' shares closed at 46 3/4 Wednesday, and AOL closed at 57. RealNetworks got a boost recently when RealNetworks topped first quarter estimates. The company will report its second quarter results July 18, and is expected to report a profit of 5 cents a share.

While AOL gains a rich platform for broadcasting rich audio and video, RealNetworks gains access to AOL's more than 23 million members and content base. RealNetworks also delivers a blow to Microsoft (Nasdaq: MSFT), its primary streaming media competitor.

RealNetworks called the agreement "substantial progress towards realizing (its) vision of the Internet as the next mass medium."

Under the agreement, RealPlayer will be distributed with the Netscape browser and through Netcenter. RealNetworks will distribute Spinner, the free Web radio player based on RealPlayer technology, as well as bundling software with its RealPlayer that enables users to easily sign up for the AOL service.

Financial terms of the deal were not released.