Tellme Offered $800 Million For Its Secrets

Know how much Microsoft values voice recognition technology? They’re willing to plop down many hundreds of millions of dollars for a company that specializes in it. Name of the company? Tellme. Ballpark figure? $800+ mil. Chump change, we say.

Nah, actually, that’s a lot of dough. But Tellme Networks has also done well for itself as a solo operation; through all of its various rounds of venture funding, it’s amassed $235 since its inception. And it’s gotten kinda big for a “startup.” Probably past that point in its life cycle. Voice recognition is still very young, and Tellme is very much “in the thick of it.” At least in principal. Because, you know, if they get snatch up by Microsoft, all original staffers don’t have the best job security in the world. Heck, who cares? $800 million split 320 ways ain’t bad.

But seriously, there’s a lot to wonder about if this deal goes through. $800 seems a high amount to throw out there, but when the size of the company being purchased is as large as it is, the number looks reasonable. The main issue we take with this move is how one accurately quantifies the business when voice recognition is still right smack dab between abysmal and poor. How does one put such a large value on something that’s just starting to find its groove. Call me crazy, but if such sums (venture funds and purported purchase price) don’t tell you the second Silicon bubble growing fast, we don’t know what will.

Things are getting better with voice recognition. The software delivered with Vista is a big upgrade over the previous release, and Apple is apparently working hard on bringing similar or superior-quality speech sensitivity. Only, Vista’s stuff isn’t perfect, and Apple’s probably won’t be much better, if at all. There’s still a ways to go before the majority is happy with it. Tellme, on the other hand, has already managed to impress many.

Tellme Networks has focused mainly on providing services directly to consumers as well as enterprise solutions. The company is showing great success mainly because it delivers what’s advertised: quality, scalable products. That’s why some think the good news at Tellme will help offset the bad in Redmond – at least in this particular sector of the market. It’s simple. Buying up Tellme will help Microsoft spar with competitors, particularly when it comes to big business stuff. Enterprises have had to rely on third-party solutions to get the quality voice software they desire (even those choices aren’t best one could ask for), and no matter how much time and money Microsoft has spent trying to convince the masses that its stuff was good, they would manage to attract very few buyers. And, yes, that’s mainly because their stuff is bad.

Still, it’s difficult to tell where and how Microsoft intends to utilize the goods after the buy (we’re fairly certain it’ll happen). Which leads us to ask: Is it possible they just want it under their roof? There are quite a few areas Tellme’s developments could be of use to Microsoft: in the enterprise, in the personal computer sector, and, yes, in the mobile technology sphere, too.

Microsoft wouldn’t be dust in the wind if it did not go through with the deal, but it wouldn’t be any worse for it, either. If you ask us, Gates or Ozzie or one of them should write the check, but if the asking price gets oh-so-close to $1bn  (which isn’t far off, to be frank), we’d have to write out a big N-O.