AOL Taps RealNetworks for Streaming Ads

America Online is expanding its relationship with streaming media giant RealNetworks in a bid to cash in on the potential for audio and video Internet ads running on its service.

The Dulles, Va.-based unit of AOL Time Warner will use RealNetworks technology, including its new Helix Universal Servers, to deliver streaming media content — including content on behalf of advertisers.

Terms were not disclosed, though at least a portion of the agreement will entail distribution for Seattle-based RealNetworks’ latest media player, which supports content delivered via Helix. As part of the agreement, America Online said it would ship the RealVideo 9 player in connection with the expected October release of its new software, AOL 8.0.

The move comes as America Online is redoubling efforts to deploy more advanced, and more effective, advertising formats on its service. Though America Online counts about 35 million subscribers, advertisers until only recently had been limited to rudimentary static ad formats. That’s beginning to change, now that the company has teamed with outside graphics vendors to add animation and interactivity to its proprietary “Rainman” publishing software.

This RealNetworks partnership will add streaming media capabilities to the mix.

“Rich streaming media content is particularly effective for interactive marketing, and we look forward to expanding our offerings in this area using RealNetworks’ latest innovations in its Helix Universal Server,” said Marty Fisher, president of AOL Technology Development.

AOL and RealNetworks have collaborated for about five years, and America Online has deployed the firm’s technology to stream audio to users of its subsidiary brands like Spinner. The two companies also jointly streamed video to Webcast the “Big Brother” television series. In 2001, AOL Time Warner was one of the major investors in RealNetworks’ MusicNet music download service.

The deal is also a major win for RealNetworks, which is seeking to boost industry adoption of Helix, its controversial, two-month-old digital media delivery system. The technology supports all major streaming media formats — including those of competitors, such as Microsoft’s Windows Media.

Last month, RealNetworks struck a distribution deal with NTI, as part of a wider technology sharing arrangement.

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