Jobs to Glaser: Get lost

By Charles Cooper
Posted on ZDNet News: Apr 16, 2004 12:44:00 PM

COMMENTARY--RealNetworks CEO Rob Glaser just proved how very bright folks sometimes wind up making the dumbest decisions.

In a private e-mail sent last week to Apple Computer CEO Steve Jobs, Glaser proposed a tactical alliance between the two companies in the digital music business against Microsoft. And oh, by the way, he added, RealNetworks sees "very interesting opportunities" that may compel it to switch support to Microsoft's Windows Media audio-video format, if Apple refuses to play ball.

The translation? Glaser to Jobs: Do a deal or else.

After Jobs and his entourage had a good chuckle and a restful weekend, they promptly leaked the contents of the proposal to The New York Times.

The translation? Jobs to Glaser: Buzz off.

If there's one takeaway from Microsoft's antitrust trial, it's that hot e-mails always come back to haunt the author.

Glaser, no doubt, could use more allies. RealNetworks, which long ago relinquished its lead in streaming media, is now just one of several companies competing in the multimedia subscription business, and it's finding it harder than ever to stand on its own. With Microsoft expected to open its own digital music store--not to mention Sony--Apple will have its hands full, after the stunning success of its foray into digital music.

The formative plot would seemingly suggest room for common cause. But Glaser gambled wrong on several counts.

Apple couldn't care less about a promise from RealNetworks to rejigger its RealPlayer jukebox so as to support the iPod. RealNetworks attributes its declining share of the media-streaming business to illegal competition from Microsoft. The courts will decide that one. I long ago deleted RealPlayer from my desktop, because I found it to be an annoying, inferior product. Lots of other people apparently feel the same way.

Glaser also trusted Jobs to remain discreet about the offer. What was he thinking? Putting a revolver on the table while you offer terms may work in Tony Soprano's world--but not in Silicon Valley. In Jobs, Glaser faces an executive with an ego even bigger than his own. "You gonna' mess with me? No, I'm gonna' mess with you!"

Worse, Glaser's gun had no bullets. The Listen.com digital music service RealNetworks operates sells subscriptions. But at the San Francisco debut of the iTunes store a year ago, Jobs scoffed at the assumption that people want to rent and not own their music. Given the history, you can understand why Glaser's offer has left Apple underwhelmed.

If I'm Steve Ballmer, Glaser's blunder just reduced the cost of any possible settlement with RealNetworks by several hundred million dollars.

The biggest blunder was to put any of this in e-mail. If there's one takeaway from Microsoft's antitrust trial, it's that hot e-mails always come back to haunt the author.

RealNetworks slapped Microsoft with a $1 billion antitrust lawsuit late last year. So why is Glaser now telling Jobs that that he's got a big incentive to switch over to the Microsoft Windows Media format? Fact is that RealNetworks does have an incentive to pursue a licensing deal with its old rival. Unlike Apple, Microsoft has a piece of technology that would make music subscriptions more attractive on portable players. So why not raise the subject in a face-to-face meeting, a telephone call or carrier pigeon--anything other than let Jobs forward the e-mail for sport to his flunkies?

If I'm Steve Ballmer, Glaser's blunder just reduced the cost of any possible settlement with RealNetworks by several hundred million dollars. Glaser, a former Microsoft executive, should have known better. Apparently, you can take the boy out of Microsoft, but you can't take Microsoft out of the boy.

biography
Charles Cooper is the executive editor of commentary at CNET News.com.