RealNetworks buys Netzip for $268 mil

Video, music software maker to combine software

Leading online video and music software maker RealNetworks Inc. said Tuesday it has acquired Netzip Inc. for $268 million in stock, following news of its second straight profitable quarter.

The acquisition will give Seattle-based RealNetworks Netzip’s proprietary software which makes files available to download faster from the Internet. RealNetworks plans to fold the software into its own offering once the deal is closed in the coming months.

Netzip also makes software that allows users to view multimedia files from the Internet and e-mail attachments.

RealNetworks will issue about 1.7 million common shares to acquire the privately held Atlanta-based company.

Faster download times are expected to entice more Netizens to RealNetwork’s service as it tries to stave off rivals Microsoft and Apple, which are distributing their own popular vid and music players.

“This enhances our efforts to lead the digital-media market as well as broadening our software download abilities,” said RealNetworks chairman and CEO Rob Glaser.

Netzip will relocate to Seattle, with most of its employees joining Real.

Separately, RealNetworks posted a better than expected fourth quarter, with profits of $6.1 million, compared with a loss of $2.2 million for the same period a year ago.

Net revenues rose to $43.5 million, up 111% from $20.6 million a year earlier.

Shares of RealNetworks rose $11 to close at $157.88, a gain of 7%. RealNetworks execs said a stock split is likely next month.

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