Solid Gains Posted by RealNetworks

RealNetworks plans to announce today that growth in its RealPlayer--a device that streams audio and video over the Internet--has surpassed more than 115 million unique and registered users.

The announcement coincides with the fifth anniversary of the launch of the Seattle-based company’s first Internet-audio product--RealAudio. RealNetworks pioneered the transmission of audio and video content over the Internet.

A key to the company’s strategy has been to give away the RealPlayer to create a market for Net-based audio and video content. The company makes money by selling Player upgrades, server software and streaming files over the Internet.

“Obviously, there is a huge opportunity in this market,” said Rob Glaser, the company’s founder and chief executive. “There is a lot of competition and we think that’s great. We continue to do super well by any measure.”

Indeed, the company turned a profit for the first time last year--earning about $8.3 million on revenue of $131.2 million.

RealNetwork’s shares, which trade on Nasdaq, were unchanged Friday, closing at $50. But its stock price has fallen almost by half since its high of $96 two months ago.

Analyst Robert Fagin, with Bear, Stearns in New York, says RealNetworks’ stock has suffered because of concerns of more competition and also because of the recent downdraft of technology stocks.

RealNetworks’ stiffer competition will come from such giants as Microsoft, Apple and America Online, he said. “The key for [RealNetworks], in the face of growing competition, is making sure they remain very relevant and are out in front on the technology,” Fagin said.