‘Voice Portals’ Tellme, MagicPhone Plan Merger

Tellme Networks Inc., the high-profile start-up created by archrivals from Netscape and Microsoft, plans to merge with Belgium-based MagicPhone, another provider of voice-activated telephone services.

No terms of the proposed deal, expected to be announced today, were disclosed.

The deal would give Tellme access to seven European markets as it shifts its focus from toll-free consumer services, an approach that has led to financial ruin at countless young technology companies, including other “voice portal” operators.

Instead, Tellme is focusing on developing custom voice-automated systems for big businesses such as banks and phone companies. By teaming up, Tellme and MagicPhone also hope to gain an edge with multinational businesses, offering voice applications that can function across multiple borders and phone systems.

Based in Mountain View, Calif., Tellme is led by top veterans from both sides of the infamous browser war between Netscape’s once-dominant Navigator program and the now-dominant Internet Explorer browser from Microsoft. Key backers, including former Netscape Chief Executive Jim Barksdale and AT&T;, have invested $250 million in the company, whose top rivals include Be Vocal and Hey Anita.

Tellme launched a voice-activated phone service last summer that allows people to call a toll-free number and say one or two words to hear information on topics including stock quotes and movies.

Revenue from European operations is expected to reach $8 million to $10 million this year, the companies said.