Rob Glaser Goes After His Next Target
By Rob Glaser; Peter Lewis

(FORTUNE Magazine) – In the spirit of "if you can't join them, beat them," RealNetworks founder and CEO Rob Glaser has picked fights recently with, among others, his ex-employer Microsoft (filing a $1 billion antitrust lawsuit over its rival Media Player software), Apple (introducing a new digital-music software intended to break Apple's proprietary lock on the popular iPods), and the Bush administration (he has donated more than $1 million so far this year to anti-Bush causes). A billionaire at age 42, the speed-talking CEO chatted recently with FORTUNE's Peter Lewis about his company's new 49-cent music-download sale, software standards, and baseball (he's a minority owner of the Seattle Mariners).

So have you spoken with Steve Jobs lately?

It turns out that most of my communications with Steve have been through the press over the past four months, not by express desire--it's just sort of how it worked out. We were working on the Harmony technology for several months, and then I contacted him in the spring. I said, Steve, what do you think about compatibility with the iPod? We think it would be great to be compatible with the iPod. And as has been reported, he forwarded that message to the New York Times, and we interpreted that as his answer.

A "stunned" Apple accused RealNetworks of using the "tactics and ethics of a hacker" for releasing Harmony, which lets music downloaded from Real be played on an iPod. What say you?

On one level I'd say I'm grateful for [Apple's response] because we got even more attention for Harmony than we would have if Apple hadn't used such colorful language. But I think substantively it's quite inaccurate, and the reality is that we create compatibility in a way that's good for consumers and, we think, long term is great for the industry.

And now you've started a digital-music price war?

We thought that for a limited time we would have a sale that we think will end up as the biggest music sale in history. And based on our sales after the first 24 hours, it's resonating beyond our most optimistic expectations. We'll end up this promotion a very strong No. 2 in digital-track sales, along with our No. 1 position in subscriptions.

Aren't you losing money at 49 cents?

Yes. For that promotional period, there's no question we'll be losing money on each and every track we sell. But long term, it's not our intent to run a price war.

What else is Real working on?

We have this great games business that I would say is sort of a hidden jewel. We created a new model for consumers to get very high-quality games for grownups. It's still only about 15% of our business. But the demographics and the number of people who play the games are phenomenal.

You've had a lot of skirmishes with Redmond lately. What's your relationship like with Bill Gates?

Bill's obviously a brilliant guy, and his role in the history of computing is obvious, and his role in philanthropy is obvious. I have a ton of respect for what Microsoft built and some disagreement on what its practices were once it got in a position of incredible market power, but a lot of people there are my friends.

What else have you been investing in lately?

The largest investment I've been involved in doesn't involve tech at all--it's this great radio network, Air America, that is having a huge impact. I personally haven't done a lot of tech investing.

One of your nontech investments is tanking. What's wrong with the Mariners?

One of the nice things about baseball: We've got 162 games a year. Even when your team is having a down year, there are other things to cheer for. This year we're not cheering for the pennant; we're cheering for individual accomplishments, like having a chance to say goodbye to Edgar Martinez and watching slack-jawed as Ichiro seems to slow down the ball to one mile an hour while he decides where he wants to hit it.