AOL Time Warner had long been a Microsoft holdout, endorsing RealNetworks' technology and, more recently, developing its own internal streaming tools for its Internet radio services. But the alliance with RealNetworks has shown signs of stress as RealNetworks has established itself as an aggregator of paid online video content through its RealOne subscription service, which increasingly competes with new features in the broadband version of America Online's Internet service. RealNetworks downplayed the announcement, saying AOL will continue to use its technology. "We don't think it means anything for Real," said Dan Sheeran, vice president of marketing at RealNetworks." What's important is not that AOL may support Microsoft technology, because it's already there as part of the operating system. What's important is that they include us, which is what they're doing and what they plan to keep doing." AOL has also been tightening its ties with Apple, giving the computer company a coveted berth in its instant-messaging network and raising the prospects of a possible AOL-Apple alliance on digital music -- although Thursday's settlement now makes such a collaboration less likely. Apple declined to comment. AOL has been stocking up on alternative digital media formats of late, including licensing audio technology endorsed by the MPEG standards group called AAC, and video technology from start-up On2. Those deals, as well as its existing relationship with RealNetworks, could leave the company a back door if it begins to chafe under Microsoft. In the meantime, AOL finally appears ready to cozy up to its longtime adversary. "This agreement underscores both companies' deep commitment to developing solutions that expand consumer choice and access to high quality content, and at the same time create new opportunities for content owners and promote innovation," said Will Poole, a senior vice president at Microsoft. News.com's Lisa M. Bowman contributed to this report.
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