Speech recognition software provider Nuance Communications (NASDAQ:NUAN) confirmed it has purchased Swype, a maker of gesture input software for smartphones based on Google's (NASDAQ:GOOG) Android operating system, for 102.5 million Oct. 6.
In a curiously structured merger, Nuance paid Swype 77.5 million at closing Oct. 6 and will pay the remaining 25 million 18 months after the closing, Nuance said in an 8-K filing with the Securities and Exchange Commission.
Swype makes virtual QWERTY keyboard software that appears on most Android phones. The predictive text application allows users to "write" words on their smartphones' virtual keyboards by swiping their fingers from letter to letter rather than tapping the virtual keys.
Android phone users who become practiced with Swype say they cut down their typing time by several seconds. The software dazzled attendees of the TechCrunch50 conference in 2008.
The fit seems logical enough, if not a little redundant. However, Nuance combined its T9 predictive text software and Dragon speech recognition product for FlexT9 keyboard, which lets users speak, trace, or tap in information into their phones.
Nuance and Swype already have a big tie. Swype was co-founded by Cliff Kushler, who previously worked at Tegic Communications created the T9 the predictive text software. Nuance acquired Tegis from AOL in 2007.
How exactly Nuance will use Swype is unclear. Asked for additional information, a Nuance spokesperson told eWEEK:
"At this point I do not have much to add other than noting that both companies are excited about the acquisition and what it means for innovations between our experienced teams and the solutions we can bring to mobile OEMs and consumers. We will share additional information as we advance these efforts and serve our customers."
The acquisition of Swype could position Nuance for an acquisition by Google, whose speech technology efforts are led by Mike Cohen. Cohen, who co-founded Nuance, led Google Voice Actions, which performs tasks similar to Nuance's Dragon applications.
Cohen led Google's effort this past summer to make Google Voice Search available on the desktop and Google Maps. Cohen recently told eWEEK Google is interested in boosting its speech and gesture input technology for not only its Android platform.
Google is also trying to purchase Motorola Mobility for $12.5 billion. If Google succeeds, it would own a major Android phone OEM, and could make Nuance and Swype a major value proposition on Android phones made by Motorola.
An acquisition of Nuance by Google could make things interesting for other reasons. Nuance software reportedly powers Apple's new Siri virtual assistant software app.