RealNetworks To Spin Off Rhapsody (RNWK)

RealNetworks (NASDAQ: RNWK) has announced its decision to spin off Rhapsody music service as a stand-alone company. According to RealNetworks (RNWK) CEO, Bob Kimball, the spinoff is directed towards making Rhapsody a more focused and profitable company.

Lately, Rhapsody has been struggling with emerging competitors such as Napster and Apple (NASDAQ: AAPL) iTunes. Rhapsody currently has 700,000 subscribers. Rhapsody is jointly owned by RealNetworks and MTV’s parent company Viacom (NYSE: VIA). Post-spinoff, Rhapsody will be based in Seattle and will have about 150 employees. RealNetworks declined to comment whether the spin-off will go public or be acquired.