RealNetworks said it isn't going to battle Yahoo's Music Engine with price drops. Real charges users $15 a month for its Rhapsody music service while Yahoo only asks $4.99 per month for an annual subscription to its own online music store.
Real's Chief Financial Officer Roy Goodman indicated the company had no immediate plans to change its pricing. "I don't think we will be lured unnecessarily or quietly into a price war," he said.
The CFO also predicted Yahoo could eventually raise prices. "Our suspicion is Yahoo is using price as a promotional tool to enter the market," he said.
Goodman further defends his company by stating that Yahoo's announcement wasn't innovative. The only thing people talked about was that it is cheap. He believes the service will be unprofitable for Yahoo and therefore unsustainable. More details at Reuters