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RealNames and Microsoft
Sat, May 11, 2002

I just got off the phone with Keith Teare, the former CEO of RealNames. He sent an email explaining that the company will shut down on Monday, and sent a pointer to his personal site, where he explains how that happened. Here's the story in Teare's own words.

Last Tuesday Microsoft informed me that it was not renewing RealNames Corporation's contract to resolve keywords in the IE browser. When the current contract comes to an end on 28 June 2002 the service will be terminated.

I am no longer an employee of RealNames. Along with 79 others I was terminated on Friday 10 May, 5 years after starting the company.

I am sure that Microsoft will do an excellent job of misinforming the public about the reasons for this decision and so I want to put the record straight.

During the past 2 years Microsoft was given 20% of RealNames stock and $15m in cash guarantees during 2000-2001 (more than 100% of our revenue that year). We were due to pay another $25m in guarantees during 2001-2002 (more than 200% of our revenue that year) but with the bursting of the bubble (and thus no IPO) the second years payment was converted to a note. The note came due on May 2nd 2002.

RealNames proposed continuing the relationship and offered Microsoft the following:

1. $5m now as payment against the note.

2. $5m between July 1 2002 and June 30 2003 or 15% of revenues - the greater of. 3. Microsoft's rev share to be able to reach 40% in steps if our revenues grew sufficiently. The guarantees for the first 5 years of a new deal were $5m, $6m, $7m, $8m and $9m.

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