March 12, 2007 2:14 PM PDT

Sources say Microsoft near deal to buy Tellme

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Microsoft is close to acquiring privately held Tellme Networks, a maker of products that bridge the worlds of speech recognition and the Internet, CNET has learned.

The deal is expected to be completed and announced later this week, according to sources familiar with the companies' plans.

Mountain View, Calif.-based Tellme is best known for its service that lets people get Internet information over the telephone, but the company also has a variety of services that businesses can use to offer automated data and directory assistance information via the phone.

A Microsoft representative said the Redmond, Wash., company does not comment on rumors and speculation. Tellme spokeswoman Megan Dyer said "we're still privately held and independent" but declined to comment on any discussions with Microsoft.

In addition to Tellme's existing products, the company has been testing a host of new products tied to the cell phone, including a program that allows users to say what it is they want and have the information sent back to their cell phone as data. Another new product lets people send Tellme a text message with a request, say "pizza places in San Francisco," and get a text message back with options.

Microsoft has been betting heavily on the intersection of the telephony and data communications worlds. In an interview earlier this month, Microsoft Business Division President Jeff Raikes talked up the role mobile devices will play, as well as the potential for merging voice and data, but declined to comment specifically on speculation that the company would acquire Tellme.

Assuming the deal goes through, Tellme's operations are expected to become part of Raikes' unit at Microsoft. The company has about 320 workers and is led by Mike McCue, a former Netscape vice president of technology.

Tellme was seen as a potential target for an initial public offering last year, though a stock deal never took place, nor did the company actually file registration documents with the Securities and Exchange Commission, a necessary precursor to going public. More recently, the company has been the subject of takeover rumors, including reports that it would be bought by Google or Microsoft.

The company, which is profitable, has raised more than $230 million through rounds of venture capital, the last of which came in October 2000.

Former Microsoft executive Brad Silverberg was among the company's early investors.

See more CNET content tagged:
Tellme Networks Inc., Jeff Raikes, speech recognition, Microsoft Corp., cell phone


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MSFT Absorption Will Kill the Technology
Tellme as a MSFT division will start hemorrhaging money immediately and anyone with any self-respect at the company will run for the exits the moment MSFT gets its hands on it, gutting whatever brain trust Tellme retains now. The options programs that MSFT has left are incapable of holding anyone with alternatives. Until they fix that, everything they acquire that isn't pure intellectual property will turn to mud. I mean, does anybody really have any reason to want to work for a company whose claim to fame is a string of anti-trust suits and an operating system that is reviled as a broken, buggy, insecure pile of half-baked ideas and stolen design concepts? No.
Posted by Sumatra-Bosch (526 comments )
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Friends don't let friends post talkbacks drunk!
Posted by KTLA_knew (385 comments )
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Friends don't let friends post talkbacks drunk!
Posted by KTLA_knew (385 comments )
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OOOHHH! Isn't that cute!
Now Billy "BOB" Richie Rich has a little friend to talk to...

Posted by Llib Setag (951 comments )
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