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SEATTLE - Microsoft says it will buy privately held Tellme Networks, a speech technology company, to bolster its communications push and enhance searches over mobile phones.
Financial terms of the deal were not disclosed yesterday. Microsoft expects to complete the purchase in the second quarter.
Sources said the two companies were in talks for a deal that could value Tellme at more than US$800 million ($1.17 billion), making it Microsoft's biggest acquisition since 2002.
Tellme, based in Mountain View, California, with 320 employees, allows people to use speech to find information on local businesses, driving directions, sports scores, stock quotes, weather and news from the internet.
Microsoft, the world's largest software maker, sees mobile phone searches as a relatively untapped market where it can compete more favourably with Google, the dominant leader in computer-based searches.
"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 also aims to combine Tellme's experience in offering voice services like such as automated directory services with its large customer base as part of its push to offer web-based phone systems.
Microsoft's Office Communications server already allows workers to access and make changes to calendars within the Outlook email system through voice commands or call someone with a click of a mouse.
The company said Tellme's voice services could take those capabilities to the next step and change how people interact with the telephone.
- REUTERS
