In many ways, RealNetworks was ahead of its time in the online audio and video business. But being early isn't always a good thing, and the Seattle company watched as other companies like Apple and YouTube emerged as dominant players. Now, Bob Kimball -- a RealNetworks veteran who took over the CEO reins last summer -- is hoping to get the company's mojo back.

"I'd love to have Real back at the top of people's minds when they think about media," says Kimball. We chatted with the 46-year-old native of Ypsilanti, Michigan about how he's trying to inject a culture of innovation at Real; what it's like trying to fill the shoes of RealNetworks' founder Rob Glaser; the plans for games business and much more. Here are extended excerpts from the interview conducted last month at Real's headquarters.

There's been some confusion over the mission of the company in recent years. What is RealNetworks? "I think there probably is some confusion. At one point, people thought of us as more of a pure media company -- a place that licenses other people's content whether it is music or video or other content and resells it. I think we are moving away from that and moving more into where I think our true strength is which is building technology and services that make it real easy to access, organize, share and play media, but not ... a media company."

So, does that mean getting out of the content business? "Getting out of the content business primarily, and we've done that in large measure by separating our music business and then we have a plan to separate our games business as well.... We think it is a good business. It is just in terms of focusing RealNetworks on where we can get the most value, I think focusing on that technology and services space -- without being a media company -- is going to create a lot more value. And it also allows us to serve our biggest constituency today which is carriers and other network service providers. That's our biggest business."

On the mystery of the company: "People for so long have equated RealNetworks exclusively with the RealPlayer. RealPlayer equals RealNetworks, when in fact the RealPlayer is less than 10 percent of our revenue. It is important to us. It is very profitable. It is a great product getting huge amounts of usage, and people use it every day to download something like seven million videos and it has been used to download over one billion since we released it. So, it gets a lot of use, but it is not our big revenue stream. The big revenue stream is really software as a service provided to the carriers -- that's things like music on demand, video on demand, ringback tones, ringtones, and also just providing full storefront services. Think about it as iTunes for everyone else.... We can present a great experience for audio and video and all of that digital content for all of those smartphones that happen to not to be iPhones. We'd also like to work with iPhone as well, but we'd like to give these carriers an opportunity to have a good relationship with their customers around digital media."

So, with less than 10 percent of your revenue coming from the RealPlayer business do you have any plans to get out of that? "Oh, no. No. I still think that is all about creating technology that makes it easy to access, organize, share video and I really see a nice synergy between what the RealPlayer is and could be and where we are going with Unifi. Unifi is a great example of us building new services that can take advantage of our huge consumer channel and our carrier channel. If you think of our consumer channel, we have over 40 million monthly active uniques playing our games and we deliver over a million game plays a day. Plus we have over 25 million monthly uniques using just the latest version of the RealPlayer, and many, many more using other versions. So, there we have a huge consumer channel and then we have a huge carrier channel where we have over 90 different carrier relationships worldwide... So, when you think of that customer base and a product like Unifi -- which is all about bringing together your digital life from mobile handets to pads to PCs to laptops -- it is perfect because we can sell to both channels."

You haven't said too much about the new Unifi service. Would you describe it as a place to store and manage all of your digital media? "I think that is exactly right. But, it is more than just a place, though. It is the control over all of your media whether it is in the cloud or still on the device. We catalog everything, no matter where it is, and allow you to see it, manage it, get access to it and push and pull from one device to another."

How does Unifi work? "We are very media focused, and we make it easier to work with your media without just choosing a file and saying this file will be synced to the cloud. We show you everything ... but we don't just do it on a file system basis. We intelligently organize it in the cloud, so for example, all of your Rolling Stones will be organized under Rolling Stones instead of four different files that sit on four different devices that you have to separately have to open up.... We actually intelligently look deeper than the file into the metadata of the actual piece of content, so we can organize it intelligently when you see it up in the cloud or when you see your universal view of all of your content. So, it is easy to find, easy to access and easy to enjoy.... I think it is critical that we embrace the way people want to use their media. We don't want to change the way people enjoy their media. We want to make it more fun."

How much will Unifi cost? "It is a typical freemium style model where there will be a free version ... and then there will be a monthly subscription tiered plans depending primarily on how much storage you want to have. There will be inexpensive plans, so as I say if you can afford a cup or two from Starbucks every month you certainly will be able to afford this."

Are you still planning on spinning off the games business? "I think the long-term plan is absolutely to still separate that business. I think it will create greater simplification for RealNetworks and better focus for them. But what I want to do is get that business established ... with their new model of what I call making GameHouse the game and moving more into social and mobile games, which is really where the growth is and the excitement in the casual games business. I'd like to see them turn the corner on that pivot, and at that point they will be a stronger, more valuable business and in a better position to be separated."

What do you make of Zynga's rise in social games and why hasn't a Seattle casual game company been able to compete or fill that position in the market? "It is really surprising to me that the gaming companies here missed it. It is probably as much as anything that the casual games companies here had existing, really nice profitable growing businesses, so it was easier for them to not be looking over that horizon and just be focusing on what was in front of them. Whereas, you had a startup, Zynga, with nothing and forcing them to look over the horizon and find where the niche was. And hey hit it right at the right time and it just exploded. There are those points in time -- right place, right time -- and I think Zynga is a good example of right place, right time, with the right technology."

That's the dilemma that faces older technology companies all of the time, and it kind of speaks to RealNetworks. How are you trying to inject a culture of innovation in the company? "Innovation is critical, and one of the things we are trying to do to get back more innovation is simplifying the business and focusing more. It gets hard, as your business gets complex and as you grow to really get that innovation focus. This last year, our strategy was really to simplify, restructure and grow. And that first arm -- that simplification -- is really about clearing the decks so you can be innovative. It also helps you understand what you are actually doing with more clarity, so you can be making more conscious innovative bets. It allows you to put money aside and say we are going to use X amount of dollars for pure innovation, R&D and new products. Part of that process is being more organized, being more simple and being more numbers focused. While that sounds like boring blocking and tackling, it is that work that frees you up to do the innovation. And we have brought in some new folks who are going to help us do that, part of it is bringing in new talent and fresh blood that look at problems in new and different ways."

Had Real gotten away from those core issues that you mentioned? "I think there has always been a strong desire to have innovation, and I think part of it is just the complexity and solving the problems of a large-scale business can get in the way. And what I am trying to do is remove the complexity -- create both a combination of of simplification and management rigor around the operations of the business -- so we have the room to innovate and we have the money to innovate. Innovation costs money. It is not free. And also trying to create a culture of innovation where we are really actively telling employees that it is important, that we want to see it from every element of the employee base and that innovation is not just coming up with a brand new Unifi product. Innovation can be coming up with a better way to build our home page for RealPlayer.... Little things like that can be innovative."

On the company's cash position: "We have a lot of cash. We have about $329 million in cash."

What are you planning to do with that cash, are there potential acquisitions you are pursuing since you've grown that way in the past? "I think it is important for us to consistently keep our eye open for good opportunities to build our product pipeline that we can sell to our large direct to consumer channel and our large carrier channel. And I think we are going to be careful about the kind of acquisitions we do going forward. We really want to look for accretive deals that can add to our bottom line."

What's your short-term plan for boosting Real's stock price? "When you are talking about stock price, I don't think it is every a good idea to think short term. I don't think that ever really works out. You have to look long-term."

Could Real be more attractive as a private company? "I feel that our ability to re-pivot and reposition the company has been unfettered over the last year. We have full support of the board to do what we had to do to get the company into a lean, focused, profitable operational state. So, I don't feel any significant hindrance to doing that as a public company. We are fully focused on doing that as a public company, and we are well on our way. We are in the back half of concluding that process... People say 'go private' and that's just another way of saying you could sell the business. And we are focused on building value in the business we have for the shareholders we have. That is our laser focus."

Glaser

Real founder Rob Glaser put his stamp on this company for so long. How is it trying to fill his shoes? "Fortunately, I have a lot of history here. I've been here for 11, going on 12 years at this point. So, I knew the team very well. I knew the business very well. I knew what kinds of things needed to be changed to get the company into a focused, simple, profitable posture. So, that helped to fill those very large shoes. Because, obviously, he's a large force. But he's still on the board, so we get the value of his intellect and his innovation and his just exhaustive industry knowledge and contacts So, we still get the benefit of that with him on the board. At the same time, we are free to run the business in completely different ways and we have support from the board to run the business differently. And I think that is helpful as well. I think every company over time needs to change and evolve, and I think we've been given a great opportunity to do exactly that."

What do you see RealNetworks looking like in three to five years? "I'd love to see the business, first of all just at a financial level, with strong profit and strong growth both. Today, we are growing the profit and we need to start growing that top line. I'd like to see us do it where we have a great software-as-a-service business for network service providers -- that is going to include mobile carriers -- so we are a large relevant player when people think about mobile services, mobile media and digital media in general and that we are back at the top of mind for people. And it is not just the carriers, but the consumers as well. So, in two to three years when people think about how they want to interact with media, I want them to think about Real again like they did in 2000. There was a time when anything to do with video, audio on the Internet, music -- all of that was very directly associated with RealNetworks. I'd like to see the company kind of get back into people's mindsets in the same way as a company that builds products that people love, that they want to use and want to interact with and we provide those products both through carriers and direct to our consumers. I'd love to see us get back to that place."

It was almost as if RealNetworks was too early on some of those digital media businesses? "I think you hit the nail on the head. That is exactly right. I look at a lot of the things we did, and we were two to five years too early. And part of that demonstrates the creativity and innovation in the building, which we still have. And we need to capitalize on that but for projects we can create great businesses out of in the nearer term instead of being too early. We want to be a year or two early, not five years early. But I think we can absolutely do it."

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