RealNetworks Shoot Me Please

RealNetworks (NASDAQ:RNWK) has just acquired Sony's (NYSE:SNE) digital music provider NetServices for $9,000,000. But they remain a part of Sony DADC. RealNetworks issued updated guidance which really does not change any fundamental opinions.

Does RealNetworks see an opportunity or did Sony just blow out a problem and cash a cheque for $9 million while retaining controls they wanted? Some may conclude a Trojan horse has been put into place.

There is probably some operational justification for the purchase. But the problem remains with RealNetworks. What do they have to offer? At this stage in the game they are still fumbling around with details and have no overwhelming compelling product that will create substantial shareholder value.

Will someone take them over and should we price in a takeover premium? Well the boss of RealNetworks Robert Glaser spent the months of Jan and Feb unloading approximately 160,000 shares. This following heavy selling for most of 2006.

Robert Glaser owns approximately 50 million shares so is the trading significant? Every move is significant. The guy is not hurting for petty cash and would not sell shares if he thought something attractive was coming up.

Sony may run this one around the track a few times for test drive purposes.