14 DAY TRIAL // Microsoft has announced that it is going to buy Tellme Networks, the speech technology company, to bolster its communications push and enhance searches over mobile phones.
As it is usual in these situations, no financial terms whatsoever were revealed. Microsoft expects to complete the purchase of the company in the second quarter of this year.
TellMe enables customers to use speech recognition to find information on local businesses, weather, news, driving directions and more. Microsoft seems to think about searches on mobile phones as an untapped market where it can compete more favorably with Google. The company also plans to combine Tellme's experience in offering voice services with its large customer base as a part of its push to offer Web-based phone systems.
"Mobile search is going to be a huge market," said Morningstar analyst Toan Tran. "Search on mobile phones is still up for grabs and Microsoft is a big believer in voice being an interface for mobile phones."
Microsoft's Office Communication server allows workers to access and make changes to calendars through voice commands within the Outlook e-mail system. According to Microsoft, with TellMe's voice services, those capabilities could be further improved.
"We see speech as a universal, simple capability to open up the potential of computing," Jeff Raikes, president of Microsoft's business group, said during a news conference today. "Tellme allows us to expand our speech platform and build on our vision of software plus services."
TellMe, based in Mountain View, California, with 320 employees, and founded in 1999 by former Netscape executive Mike McCue, is privately owned by its employees and investors that include capital firms Benchmark Capital and Kleiner Perkins Caufield & Byers.
It provides automated phone services to companies including Merill Lynch and Federal Express and serves more than 40 million people every month. The two companies have been analyzing the possibility of a partnership for a while, while the talks of the acquisition intensified around December.