On the same day it posted a loss of $10.4 million (around £5.7 million) for the first quarter of 2004, RealNetworks also announced its president, Lawrence Jacobson had resigned, effective immediately.
After working for the Seattle-based digital media company for three years, Jacobson served his notice "to pursue other opportunities and spend more time with his family," RealNetworks said in a statement. Jacobson will continue to work temporarily for the company as a strategic adviser, and RealNetworks has no plans to fill the position of president at this time, it said.
Assuming Jacobson's responsibility for running the company’s international operations, RealNetworks promoted Dan Sheeran from senior vice president of marketing to senior vice president international.
On the financial side, RealNetworks' $10.4 million net loss for the quarter ended March 31 - equal to a loss of $0.06 per share - was almost double its net loss of $5.3 million or $0.03 per share in the fourth quarter of 2003. On a year-on-year basis, in the first quarter of 2003 the company posted a net loss of $2.8 million, or $0.02 per share.
The company said the lion's share of its losses in the first quarter was due to expenses related to the removal of PGA Tour. content from its subscription services (a loss of $4.9 million) and the costs of RealNetworks' antitrust litigation ($2.3 million). Excluding those expenses, the net loss was $3.2 million or $0.02 per share, it said.
RealNetworks lodged a private suit against Microsoft last year, accusing the software giant of using its monopoly powers to control the digital media market.
On a brighter note, revenue for the quarter was $60.4 million, up 29 percent from the first quarter of 2003 and an increase of 12 per cent from the fourth quarter of 2003, the company said.
RealNetworks credited the growth in revenue to robust consumer services, particularly in music and games. The company said it currently has over 450,000 subscribers to its digital music services.
Additionally, the company's first quarter results include approximately $2 million of revenue associated with the acquisition of GameHouse in January, it said.
RealNetworks expects its momentum to continue and forecast a return to quarterly profitability by the end of 2004, excluding antitrust litigation expenses.