Software firm enhances MCI's Internet service Progressive Networks seeks to expand medium; Communications

SEATTLE — SEATTLE -- Progressive Networks, the Seattle company that's been a leader in Internet audio and video software, announced a deal yesterday with MCI that it claims moves the Internet closer to becoming a mass medium as pervasive as radio or television.

At the same time, Microsoft, which recently bought a 10 percent stake in Progressive Networks, announced that it had purchased VXtreme, a Sunnyvale, Calif.-based rival of Progressive Networks that makes technology for broadcasting video over the Internet.


The purchase further enhances Microsoft's position in defining the technology used to ship sounds and images online.

Microsoft bought an equity stake in Progressive Networks two weeks ago, and the two companies announced a plan to work together in developing technology and standards.


Microsoft group Vice President Paul Maritz said yesterday that the deals with Progressive Networks and VXtreme will give Microsoft access to different types of technology that enhance Internet broadcasting capability.

"There are several ingredients you need for a strong platform," Maritz said.

Progressive Networks has installed its software directly into MCI's Internet backbone, one of the largest in the world. With that, Progressive Networks' Chairman Rob Glaser said, any Internet user can now access audio and video broadcasts.

ABC, Atlantic Records, ESPN and the Seattle Mariners are among the first organizations that have signed on to broadcast over the MCI-Progressive Networks service, dubbed RealNetwork.

Progressive Networks' RealAudio software has become widely used on the World Wide Web since its introduction in 1995. But because of capacity constraints, no more than 10,000 or so computer users have ever tuned into a broadcast at once, Glaser said.

Now up to 50,000 people can listen to a live broadcast, with the potential to reach 200,000 or so in the near future, Glaser said. That number jumps significantly when including people who tune in "on-demand" instead of during the live broadcast.

Progressive Networks and MCI are sharing costs of the project and will split profits, if there are any. Executives declined to detail the financial terms.

Also yesterday, Microsoft executives said the company's purchase of VXtreme would enhance the software it sells companies that run Internet sites or internal corporate intranets.


VXtreme, with 90 employees, was founded two years ago and now counts among its customers CNN Interactive, CNNfn, The Financial Network and General Electric. Its primary financial backers include Informix, Cisco Systems and Softbank.

Financial terms of the acquisition were not disclosed. Reuters quoted an unnamed source valuing the acquisition at $75 million.

Microsoft is moving on several fronts to take the lead in setting technological "standards" for broadcasting video over the Internet -- a capability that could be used for corporate training videos shared among branch offices, along with larger-scale broadcasts of baseball games or movies over the Net.

Pub Date: 8/06/97