1046327--3/2/2009--REALNETWORKS

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{product, market, service}

{system, service, information}

{loss, insurance, financial}

{tax, income, asset}

{stock, price, operating}

{acquisition, growth, future}

{customer, product, revenue}

{cost, operation, labor}

{property, intellectual, protect}

{interest, director, officer}

{product, liability, claim}

{personnel, key, retain}

{condition, economic, financial}

{stock, price, share}

The success of our subscription services businesses depends upon our ability to increase subscription revenue and to license compelling content on commercially reasonable terms. Music publishing royalty rates for music subscription services offered through RealNetworks and Rhapsody America are not yet fully established; an unexpected modification or application of settlement terms could negatively impact our operating results. An appeal of, or other industry settlement relating to, the April 2007 Copyright Royalty Board decision regarding Internet radio royalties and minimum payments could result in material expenses that would harm our operating results and our ability to provide popular radio services. Our RealDVD PC application is currently the subject of pending litigation, and we could incur significant expenses or be further prevented from selling RealDVD. We may not be successful in maintaining and growing our distribution of digital media products. We face risks with respect to certain matters in the governance and management of our Rhapsody America joint venture and the integration and operation of assets that have been combined to form Rhapsody America. We and MTVN have certain contractual rights relating to the purchase and sale of MTVN s membership interest in Rhapsody America that may be settled in part through the issuance of additional shares of our capital stock, which would dilute our other shareholders voting and economic interests in us, and may require us to pay MTVN a price that exceeds the appraised value of its proportionate interest in Rhapsody America. Risks Related to Our Technology Products and Solutions Business Contracts with our carrier customers subject us to significant risks that could negatively impact our revenue or otherwise harm our operating results. The mobile entertainment market is highly competitive. A majority of the revenue that we generate in our Technology Products and Solutions business is dependent upon our relationship with a few customers, including SK Telecom; any deterioration of these relationships could materially harm our business. Our traditional system software licensing business has been negatively impacted by competitive factors, and we may not experience improved sales of our system software products. Risks Related to Our Business in General Our operating results are difficult to predict and may fluctuate, which may contribute to volatility in our stock price. Uncertainty and adverse conditions in the economy could have a material adverse impact on our business, financial condition and results of operations. New products and services may not achieve market acceptance or may be subject to legal challenge that could negatively affect our operating results. We depend upon our executive officers and key personnel, but may be unable to attract and retain them, which could significantly harm our business and results of operations. Acquisitions involve costs and risks that could harm our business and impair our ability to realize potential benefits from acquisitions. An impairment in the carrying value of our goodwill or other intangible assets could adversely affect our financial condition and results of operations. An impairment in the carrying value of our long-lived assets could adversely affect our financial condition and results of operations. We need to develop relationships and technical standards with manufacturers of non-PC media and communication devices and interoperability of our services with these devices to grow our business. We may be unable to adequately protect our proprietary rights or leverage our patent portfolio, and may face risks associated with third-party claims relating to our intellectual property. Our business and operating results will suffer if our systems or networks fail, become unavailable, unsecured or perform poorly so that current or potential users do not have adequate access to our products, services and websites. The growth of our business is dependent in part on successfully implementing our international expansion strategy. We may be subject to market risk and legal liability in connection with the data collection capabilities of our products and services. We may be subject to assessment of sales and other taxes for the sale of our products, license of technology or provision of services. We may be subject to additional income tax assessments. Risks Related to Our Previously Announced Separation of Our Games Business We announced our intention to separate our global Games business into an independent company and to distribute shares of the newly created games company to our shareholders. If such transactions are postponed for a significant period of time or not completed, our stock price and business may be adversely affected, and we may not realize the anticipated benefits of the separation transactions. Risks Related to the Securities Markets and Ownership of Our Common Stock Our directors and executive officers beneficially own more than 38% of our stock, which gives them significant control over certain major decisions on which our shareholders may vote, may discourage an acquisition of us, and any significant sales of stock by our officers and directors could have a negative effect on our stock price.

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1046327--3/2/2009--REALNETWORKS_INC