The Short Names

RealNetworks (NSDQ: RNWK) conducted a deep reorganization in the second quarter that led to the elimination of 85 jobs, including 25 percent of the company’s execs. Today, it announced that the changes are largely complete and is busy trying to increase revenues of current products, and trying to beef up a largely non-existent future product pipeline. RealNetworks President and CEO Bob Kimball, said during the company’s quarter call: “The product pipeline is not where it should be. Because some of our past products failed, we have work to do to rebuild our pipeline.”

Before plowing into the product changes, RealNetworks said it made an executive change today, replacing John Barbour, the head of the Games business, with Matt Hulett, formerly Chief Revenue Officer of Games. Kimball said the decision was based on making sure the game’s leader was based in its Seattle headquarters. For the past two years, Barbour has been computing from New York. “Given the urgent need to pivot our Games business to social and online games, we think it is critical to have a leader based here in Seattle,” he said.

The company still anticipates spinning off the games business, but said it was impossible to say how long it will take. “We believe in our games business, and we don’t have to rush. We are building value,” Kimball said. “But it still does not fit with our core structure.”

Decreasing revenues will remain a problem for the company. In the second quarter, revenue from Real’s Technology Products and Solutions, Media Software and Services, and Games businesses (excluding Rhapsody) was $88.9 million, or less than the $95.3 million recorded in the year-ago period. Third quarter revenues are expected to be even lower.

To that end, Kimball said he sees two areas for growth. In the short-term, it has to do better at selling the products it already has. It will be trying to generate more sales of its ring-back tone business through existing carrier relationships by creating new marketing programs, including Twitter and MMS campaigns and free trials. In the second half of the year, it will be launching a new storefront with Sprint (NYSE: S) that will offer ringtones, ring-back tones and music on demand.

Longer-term, it has to develop its product pipeline, Kimball said. By the end of the year, it will be leveraging the expertise it has on the client side, with its media player, and its products on the server side to release a new product, which competes in the trendy new media cloud business. Kimball didn’t provide many details, but said it would be sold to carriers, OEMs and other companies to provide a media service that protects, organizes content, while also providing access on multiple screens, and the ability to share.

Release. | Earnings Call.

Related

• RealNetworks Finally Removes ‘Interim’ From CEO Kimball’s Title
• RealNetworks Reorganizes—Again; 85 Jobs Cut, $10 Million Charge