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RealNetworks buys stake in Listen.com

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CIOL Bureau
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LOS ANGELES: RealNetworks Inc. has said that it had taken an undisclosed stake in struggling online music firm Listen.com, transforming a one-time competitor into a close ally.

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Listen.com, which recently cut its staff to 50 from 70 and has been seen as a potential takeover target, said it will use the investment to boost its Rhapsody music subscription service, which competes with MusicNet, an online service 40 percent owned by RealNetworks.

Under the deal, RealNetworks' technology will become the primary platform for the Rhapsody service and the two companies will explore collaborating on future services, they said. Prior to Wednesday, Rhapsody's primary platform had been Windows, made by RealNetworks' chief rival, Microsoft Corp., which it will now support as a secondary platform.

The investment comes on the day that AOL began offering a revamped version of MusicNet to its 27 million U.S. Internet customers, the biggest move yet to bring commercial online services to the mainstream as they struggle against free, unauthorized services like Kazaa.

Analysts said the investment reflected RealNetworks' desire to hedge its bets in the still-developing field.



"They're making multiple bets. Now that they have a stake in Rhapsody, they can promote whichever service they feel best meets consumer needs," said Phil Leigh, analyst with Raymond James and Associates.

© Reuters

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