Its Official: Microsoft to Acquire Tellme Networks

Microsoft's planned acquisition of Tellme is one step in a broad-ranging effort to use voice technology as an information-access interface.

Microsoft, as expected, on March 14 announced its intent to acquire voice-search platform provider Tellme Networks as part of a broad-ranging effort to use voice technology as an interface for accessing information and services.

"We see voice and speech recognition as way to improve interaction with productivity software. Last week at VoiceCon we said we expect that in three years 100 million people will be able to click to call within their applications," said Jeff Raikes, president of the Microsoft Business Division, in Redmond, Wash. "We think speech recognition will be part of that. People are on the go. They want the ability to use voice as a way to interface—whether it is to access information or connect with callers."

Microsoft would not reveal the price it agreed to pay for Tellme Networks, a privately held company with over 320 employees and such Blue Chip customers as FedEx, United Parcel Service of America, American Airlines and Merrill Lynch.

Microsoft said it intends to broadly exploit Tellme Networks speech recognition platform, which provides hosted services to its customers for voice-based search.

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Specifically, Microsoft is evaluating such developments as hosted voice-enabled customer services offerings that work with existing Microsoft Unified Communications products, adding voice user interfaces to existing Microsoft products, and the integration of mobile phone-based search services with Microsoft Live Search for mobile.

Microsoft will also target its ISVs and other partners to build new speech-based products or services on top of Tellme Networks standards-based platform. What that means to developers working with Microsofts existing speech server platform is not yet clear.

"We want to use the Tellme technology to enhance and extend what our developers can do," Raikes said. "There will no doubt be things we want to rationalize. They have tremendous strength in hosted solutions, but now most things tend to be on-premises. In the next few months we want to help ISVs understand how the combination of technologies will help them. Well be able to come out with a road map that will allow developers to build on what theyve done."

Read more here about the implications of the Microsoft-Tellme Networks deal.

Tellme Networks claims that some 40 million people per month access services based on its platform. Services range from 411 directory assistance to information search on 1-800-555-TELL, and customer service and ordering systems for American Airlines, Merrill Lunch and ETrade.

"We process 2 billion calls a year on our platform and get paid for every one of those calls," said Mike McCue, co-founder and CEO of Tellme Networks, in Mountain View, Calif. "Our customers need to have good, strong interaction with their customers on the phone and be able to satisfy customer requests, [whether those are] requests for flight information or directory assistance lookup. When they do that well they make their customers happy," he said.

Tellme Networks platform is based on the VoiceXML 2.0 open-standards specification. The standard describes how to build voice applications that provide access to Internet data from any type of phone.

Although McCue pledged Tellme Networks continuing commitment to that open standard, Microsofts Raikes was less forthcoming when asked about continuing support. "We expect we will finalize our first wave of plans in 60 to 90 days," Raikes said.

Once the acquisition closes during the second quarter of 2007, Tellme will continue to "operate independently," and Microsoft said it expects that members of the executive team will join Microsoft. Tellme will maintain its operations in Mountain View as part of the Microsoft Business Division.

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