Microsoft acquiring Tellme Networks
Microsoft said Wednesday it would buy Tellme Networks Inc., which provides voice-enabled mobile search, directory assistance and computerized, speech-driven customer service hotlines.
Microsoft said Tellme’s technology could be applied to a wide swath of products, including its market-leading Office suite and mobile search, as well as applications for the home and car.
“We think you should just be able to say, ‘Show me the Daily Show,’ (and be) watching what you want on TV just by speaking it,” Tellme Chief Executive Mike McCue said.
McCue and Jeff Raikes, president of Microsoft’s Business Division, also envisioned cellular and Internet-based phones that ask users what they want to do. Then, depending on the answer, the devices could establish a conference call, deliver sports scores or directions to a neighborhood coffee shop.
Executives declined to comment on a news report setting the value of the deal at about $800 million.
In a note to investors, Credit Suisse analyst Jason Maynard estimated Microsoft would pay more than $1 billion.
Tellme, a privately held company based in Mountain View, Calif., powers American Airlines’ computerized phone line that lets travelers check flight information, as well as the voice-recognition system that lets callers order a pizza from Domino’s without speaking to a real person. It also provides 411 directory assistance to AT&T; and Verizon Wireless, and is used in some form by about 40 million people each month, McCue said.
Raikes said Microsoft would be able to combine its own work on voice commands for Windows Mobile devices and Vista, the latest version of its Windows operating system, with Tellme’s approach to offering software as a service over the Internet -- a major shift in the software industry’s business model that Microsoft is just warming to.
“It would be a really nice opportunity to have organizations paying Microsoft ongoing service revenue,” said Rob Horwitz, an analyst at the independent research group Directions on Microsoft.
Horwitz said Microsoft had “really lusted after” the mobile device market but that the Windows Mobile platform has been slow to catch on. Licensing Tellme’s applications to service providers, or building its Windows Mobile applications on top of the Tellme platform, could give the Redmond, Wash.-based software maker’s mobile division a boost.
Tellme’s mobile business search application, which lets cellphone users text message or say what they’re looking for, from a map to a phone number, could also help Microsoft edge ahead of Web search leaders Google and Yahoo, said Roger Kay, president of Endpoint Technologies Associates of Wayland, Mass.
Shares of Microsoft rose 68 cents Wednesday to $27.40.
