RealNetworks, Mattel 'Quone' Scrabulous

(MoneyWatch)  In these days where tales of dire financial straits are a dime a dozen, we can all take heart from those who keep finding a way to wring a few extra bucks at the expense of people who just want to have a good time.

Take RealNetworks, which originally made a name for itself by sucking blood from Napster's corpse, offering a theft-proof way to put music on the Web at a time when clueless music labels needed just that. That lucrative sell-out led to Rhapsody, which is actually one of the rare consumer-friendly music sites for sampling music, even if iTunes offers a much better venue for buying songs.

Now RealNetworks is injecting itself into the great Scrabulous debate. Scrabulous is an online version of Scrabble that is so wildly popular that it's become one of the defining Facebook applications, with nearly 700,000 Facebook users. That's not surprising. Scrabble has weaved its way into our culture. In a Seinfeld episode, Kramer playes the word "Quone" and when Jerry calls him on it, Kramer says it's a medical term: "If a patient gets difficult, you quone him."

Scrabulous works for gamers, but it's gotten difficult for Hasbro and Mattel. Mattel, of course, made its fortune from literally (and figuratively) poisoning kids with toys like Barbie. So RealNetworks is stepping forward, not to defend Scrabulous but to quone it. And much like Kramer's neologism, it makes less sense the more you look into it.

In 1938 Alfred Mosher Butts, an architect, created scrabble. A lot of lawyering and financial dealing put it in the hands of Hasbro, and eventually Mattel. Which is another way of saying Hasbro and Mattel did zero innovation on Scrabble, but get all the money anyway. Now some clever folk have added innovation to Scrabble by making it irresistible online.

Instead of rewarding that innovation, Hasbro/Mattel is copying it. And RealNetworks is helping. This is anti-innovation, and poison in the technology industry. Why would RealNetworks cross 700,000 of the Internet's savviest users?