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'Net streamers unite
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February 23, 1998: 4:18 p.m. ET
RealNetworks acquiring Vivo Interactive for $17.1 million in stock
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NEW YORK (CNNfn) - RealNetworks Inc., which pioneered the ability to send audio and video over the Internet in real time, said Monday its is acquiring competitor Vivo Interactive for $17.1 million in stock.
All outstanding shares of privately held Vivo will be exchanged for 1.1 million RealNetworks shares (RNWK). Once the deal is closed, the new shares will represent 3.4 percent of Real Networks' 32 million shares outstanding.
The companies said they expect the deal to close within 60 days.
RealNetworks said a large portion of the purchase price will be written off as a one-time acquisition charge, although it didn't specify the quarter in which the charge will be taken. Officials don't expect to purchase to have a negative impact on 1998 earnings.
Rob Glaser, founder and chief executive officer of RealNetworks, said the acquisition will make it easier for Web publishers to add audio and video content to sites.
"The streaming media market is growing at a phenomenal rate. Having tools that make it easier to create and publish streaming media content is crucial to further fuel growth," he said.
Both companies specialize in delivering audio and video through the Internet in real time. In contrast to older multimedia formats, streaming media files play as they are downloaded.
Steffan Ericsson, founder and chairman of Vivo Software Inc. said the combination will help Web developers by incorporating more capabilities into a single system.
"We see this acquisition as a way of bringing the leading platform and tools together, making it easier for customers to standardize on a best of breed offering," he said.
The deal is the latest in a string of recent acquisitions among streaming media companies. Last year, Microsoft Corp. took a minority stake in Real Networks and VDONet and gobbled up streaming video company Vxtreme.
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