DivX is a small San Diego company with clever software for compressing and sharing video files, standing courageously - or perhaps foolishly - directly in the path of a full-bore Microsoft marketing assault.

Last week, DivX rolled out new products that go somewhat beyond what Microsoft now offers.

There is a clear need for what DivX is selling. High-quality video files are huge, much too big to easily distribute online in the way legal music services such as Apple's iTunes Music Store sell songs. A two-hour movie on DVD takes up about 4 gigabytes, which would take at least several hours to download through a broadband cable or DSL connection.

DivX sells products under the same name centering around a "codec," software for compressing and decompressing video. The DivX codec can squeeze that same two-hour movie down to about 1 gigabyte, while a 90-minute movie might be only 650 megabytes, with almost no decline in image quality. That's small enough to make online distribution practical.

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