RealNetworks, Inc. (RNWK)

BOND: So, Goldfinger! Do you expect this purveyor of a digital media standard in competition with Apple, the manufacturer of the iPod, and Microsoft, the manufacturer of Windows, to flourish and enjoy returns beating the S&P 500 over time?

GOLDFINGER: No, Mr. Bond! I expect them to die!

I think that this company is a loser in the long term because they are terrible at everything they do. Well, maybe that's harsh, but they are certainly not a leader in anything that they do.

Their streaming media player has been outclassed by a website based on flash (Youtube). I don't see realmedia files anywhere anymore.

Their music store is not the cheapest, most portable, or the one offering the biggest selection. A face among the crowd with no edge except it's association with MTV. (Is that really so great? Does it beat association with iPods? An establised online retailer, or a music label?)

Their foray into Open Source was met with strong resistance from the targeted community.

If they keep up like this, I don't think that they will outperform the market.

Combined revenue from all of their business lines may keep them afloat, (diversifying faster than they can completely fail at one thing) but without a catalyst there's no possibility they will take off.

95% of the stock is in the hands of institutions and corporate insiders. RNWK has broken above resistance and is steadily increasing after many years of quiet accumulation. It's too late at this price to make the returns the institutions will make, since they were buying in the $5-7 range, however, doubling at $22-25 is not out of the question.

We're living in a digital world, and RNWK is a leading provider of digital media services and software. The stock has fallen from 12, in 2005, to 8 and is a good buy at this level. Sales and earnings in the 1st quarter of 06 grew by over 50% from the previous year and the Co is financially strong.

With the Best Buy Digital Music Store about to be marketed to heck (and several other companies I'm sure), Real will be getting a large revenue increase form it's "all-you-can-eat" and single tune options.

Deal with SanDisk gives needed boost

Real has, though it's client is a mess, a good technology on the backend: the former helix server is the only one out there, able to in- or decrease the quality of streams on the fly, depending on the users bandwith. By WebTV becoming more and more relevant for mass media, this could be a good shot for either google or microsoft...

within 3 months

The price would go up!

RNWK will outperform the market this year as they are horribly undervalued and perception of the company is incorrect after big investments in online gaming and Rhapsody Music service.

Undervalued online content distributor which is growin its revenue source from online casual games around the entire world, including Europe and South America. Casual games is the fastest growing segment of the videogames business and RNWK is well positioned to take advantage of higher profit-margins in this sector and/or be acquired by a larger media company interested in entering the space.

Big deals and GOOGLES need to get into games and music - look for a good speculation play.

Then look into a solid company with their hands in a lot of growing revenue streams.

With MTV and games on the internet, this could be the next Apple.

Proposed by Good People

Stock is trading at its Tangible Book value current. Balance sheet looks solid with tons of cash. While It has losing money (I don't remember the last time this company reported a possible EPS), it should be able to take on several more quarters of losses before it has to shut the door.

My biggest concern for Real Network is... it is losing its market share (which was small to begin with) to its competitors, and goes with it is the steady revenue stream. While it is spending 20% of its revenue on R&D, it has not come out with a product that Wow comsumers for a very long time. It needs to have a breakthrough in the media technology, or something that take the competitors by surprise - like Apple did with iPhone.

It needs to improve the bottomline before the stock could perform well again. This is going to be an uphill battle for the management turn things around. Network media market is saturated and maturing, so growth potential becomes limited. Shareholders are going to have to suffer for a long time.

isn't doing much now but will shine in the second half

I like the below $10 price and its potential for a good return.

this is a gamble. if they fix the product (yes, Rhapsody) and make it work nicely (fix the goddamn bugs!) and everywhere (iphone? everywhere-over-the-air-device?) they'll be the domination in music-reniting business. so far nobody has a better offering.

if they don't do all those things, well, they'll be a big boat in a big fleet.

PE high but if that were tech critieria nobody would own MSFT, GOOG, this is insider buying pick.