MICROSOFT SETTLES WITH REALNETWORKS

RealNetworks sued after Microsoft bundled the infernal Windows Media Player within the operating system. Unfair, RealNetworks claimed in court; a bully beating up on smart but small nerds.

Tuesday afternoon, Microsoft Corp. agreed to pay RealNetworks $761 million to settle the suit, now almost two years old. According to Reuters:

RealNetworks' suit, filed nearly two years ago, was one of the last remaining major antitrust actions against Microsoft, which has spent the last three years reaching agreements with several U.S. states and other companies.

In July, Microsoft agreed to pay $775 million to International Business Machines Corp. in a discriminatory pricing settlement. Last year, it agreed to pay Sun Microsystems Inc. $2 billion. It reached a $750 million settlement with Time Warner Inc. in 2003.

Terms: $460 million in cash to settle all claims of damage, plus RealNetworks gets "licenses and commitments that give it long-term access to Windows Media technologies to enhance the Real Player software," Reuters reports.

Enhancing the RealPlayer cannot be difficult, given its suck-ass performance. RealNetworks benefits by Microsoft promoting the Rhapsody subscription music service -- owned by Real -- through MSN.

What will this mean for Apple and its now-dominant iTunes software? It's all about perception, and that's not in Apple's favor.

Apple on Tuesday announced record earnings ($430 million) for the quarter, yet its stock consequently tumbled -- because Apple didn't overachieve enough for Wall Street.

Apple also pissed off partners by demanding a 10-percent license fee on devices that use an iPod port. The Microsoft-Real deal could cause further jitters for the Mac makers. Or, Steve Jobs could introduce something fab, something new, on Wednesday, and all will be forgotten for the next several months.