For a while RealNetworks, Inc. had it made. 
With the hottest technology on the Internet and Microsoft Corp. as an investor, the multimedia streaming company could focus on innovation. Now the giant is at the door, and RealNetworks is feeling the tremors.
In his keynote at NetWorld+Interop 98 here, founder and CEO Rob Glaser stayed away from the hotbutton issue of Microsoft's announcement this week of its NetShow 3.0 beta release, a competitor to RealPlayer. Instead, Glaser reinforced the need for many players in the burgeoning multimedia-on-demand arena.
The top three areas where streaming technologies are going to evolve are desktop conferencing and telephony; multimedia e-mail and messaging; and streaming media delivery such as online broadcasts, he said.
"In the next three to four years, multimedia e-mail [with video and voice included] will become as prevalent as text-based e-mail," Glaser said. "We're not used to hearing ourselves on a store-and-forward basis, but we'll get there like we did with voice mail." He said streaming technology vendors need to work on the ability to edit voice and video messages.
Glaser said people want the human connection that comes with these innovations. "It's much easier to convey emotion and complexity," he said. Studies, he added, indicate that such advances could lead to greater content retention and a possible 70% reduction in training costs for companies.
Online broadcasting is on the rise, Glaser said. The number of streaming Web pages has grown from 80,000 last year to 302,000 this year, he said. Hours of live broadcasting on the Internet have ballooned from 40,000 last year to 150,000 this year.
"The 'Net is emerging as a news medium," he said. People are spending as much time a week, 3.5 hours, reading online news as they are reading newspapers, he said.
In addition to news, though, many companies are using RealPlayer and the newly announced RealSystem G2 for marketing and selling, teaching and training, and internal communications.
3Com Corp. uses streaming feeds over its intranet to broadcast company meetings to employees. Boeing Corp. publishes a news broadcast about company happenings to employee desktops, saving videocassette production and delivery costs. Glaser said Boeing estimates the savings to be more than $130,000 a week.
But Glaser said all this growth in use is not without its challenges, including bandwidth demands, scalability and reliability, and keeping open and extensible standards.
In its G2 product, announced last week, RealNetworks included SmartStream, which can determine bandwidth allocation and, rather than cutting out a signal to buffer it, downshifts to lower speeds. In a demonstration, Glaser showed that with applications such as listening to music SmartStream may diminish quality, but it does not drop the feed.
RealNetworks also is driving the effort to standardize the XML-based Synchronized Multimedia Integration Language. "It will be the HTML of streaming media," he said.
