August 31, 2000 4:50 PM PDT

AOL nabs Quack.com for voice recognition

America Online said today it has acquired start-up Quack.com in a bid to make AOL services available over an ordinary telephone.

With the purchase, the online giant steps into territory staked out by "voice portals" like Tellme Networks and BeVocal. These services provide information over the phone, such as stock quotes, driving directions and news headlines, through a voice-recognition interface.

It's not the first time AOL has moved in this direction. The company long ago bought the MovieFone service, which provides information on local movie listings over the telephone. It's the first time AOL has moved aggressively toward putting its broader information into a voice-recognition system, however.

Analysts said the choice of Quack was largely for AOL to get that company's technical staff, rather than for use of the Quack.com portal itself.

"They really needed talent they didn't have in house," said Kelsey Group analyst Mark Plakias. "There is nobody AOL can buy with sufficient capacity to handle all of AOL's customers."

The voice portal market is still in its infancy, with just a few companies in the market offering first-generation services to consumers or business customers. Nevertheless, a host of companies has sprung up in the past year offering or developing some slice of this market.

The idea behind the services is that many people still don't have reliable Web connections, or want Net information while they're between computers, or simply would rather dial a phone than tap away at a keyboard.

Tellme and BeVocal today offer among the most comprehensive services available in this market. But Quack has also been near the top of the market for months, if only for its connections. In May, the company agreed to merge its operations with Lycos to create a new voice portal. That deal recently fell apart--an outcome that becomes more explicable in the light of today's news.

AOL itself has taken other small steps toward voice-enabling its services. The company invested in SpeechWorks, a voice technology company, earlier this year.

Quack has based its portal services largely on SpeechWorks technology, boosting the logic of today's deal.

Analysts predicted that AOL would progress slowly in integrating the voice features with the rest of its proprietary service. A likely first candidate is voice access to email, which AOL has already been trying to do itself.

"They're seriously bogged down in voice-enabling their message flow," Plakias said. "AOL knows it can't get out there with some half-baked solution."

The companies aren't yet releasing details on how the service will be launched or specifics on the financial transaction.

AOL said the purchase was aimed at broadening its already huge member base.

"Quack.com's technology will help extend the AOL experience beyond the PC and give members the ability to turn any wireless or home or office phone into a robust AOL access device," Ted Leonsis, AOL's president, said in a statement.

 

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