RealNetworks: That Game Spinoff Isn’t Happening (Obviously). But We Do Have Plenty of Cash…
Last spring, RealNetworks announced plans to spin off its fast-growing casual games business into a separate company. That’s not going to happen in the midst of a meltdown, and today the company formally acknowledged the reality: It says there’s “no visibility as to when conditions will support separation,” so it has called off its bankers and will write off the fees it has spent on the move so far.
That’s no big deal: RealNetworks (RNWK) is writing off all sorts of stuff. It will end up taking charges of up to $249 million when the company reports its fourth-quarter earnings next week, the company announced this morning.
It also narrowed its revenue outlook a tad: Real Networks had previously predicted Q4 totals of $150 million to $157 million; now it’s saying it those numbers will land between the $151 million to $153 million range.
Not included in Real’s kitchen-sink press release: An acknowledgment that it is laying off “less than 20″ people at Rhapsody America, the music subscription joint venture it runs with Viacom’s (VIA) MTV. Real had already canned 130 people in December (and yes, it will be taking a charge for those firings, too).
But here’s the interesting thing about Real, which has fallen off most investors’ and tech-watchers’ radars: At a time when all sorts of digital media companies are gasping for air, it has actual revenue-producing businesses (Rhapsody and its game units) and a pile of cash to play with–$370 million at the end of the last quarter. It won’t be a huge surprise if CEO Rob Glaser starts snapping up struggling start-ups that looked a lot flashier a year ago.