Tellme speaks in a new language for Microsoft
SAN FRANCISCO (Reuters) - Mike McCue never imagined he would be an employee of Microsoft Corp. (MSFT.O) -- the company that crushed his former employer, Netscape, during the Web browser wars of the late 1990s.
As chief executive and co-founder of Tellme Networks Inc, an early leader in search on mobile phones that was acquired by the software giant in March, McCue now stands at the forefront of Microsoft's strategy in two areas: online services and voice-recognition technology.
Tellme brings to Microsoft the world's largest database of voice-recognition data, and employees versed in a Web-based business model that threatens Microsoft's traditional, out-of-the-box software business.
"Microsoft is trying to advance in areas that it hasn't been familiar with in the past. It is trying to embrace the differences, not eliminate them," McCue said in an interview with Reuters on the sideline of the Web 2.0 Expo.
"We don't sell any software. It's only services."
Tellme will stay in its offices in the heart of Silicon Valley, hundreds of miles away from Microsoft's Redmond, Washington campus, and operate like an independent entity within the $44 billion software maker
"When you empower a team and tell them do whatever you need to do and make whatever technology decisions, they can operate like a start-up inside the company," said McCue. "Ten years ago, that would have never happened."
Microsoft did not disclose how much it paid for Tellme, but sources familiar with the situation previously told Reuters the companies were in talks for a deal that could value the company at more than $800 million. At that price, it would be Microsoft's biggest acquisition since 2002.
Tellme launched a new mobile search service on Tuesday, which allows users to request information by voice free of charge and see the results pop up with maps and directions on the phone's screen.
The Tellme acquisition is expected to enhance Microsoft's position in searches done from mobile phones, which the company sees as a relatively untapped market where it can compete more favorably with current Web search leader Google Inc. (GOOG.O) and with Yahoo Inc. (YHOO.O)
At the heart of Tellme's service is a voice-recognition database that allows the company to accurately predict what information callers are seeking and decipher many different accents and dialects. Tellme said it adds 9 billion "utterances" a year to its database.
"It's one of the assets that Microsoft valued pretty highly," said McCue. "Mobile search and PC search will be very different things. The leaders in PC search won't necessarily be the leaders in mobile search."
McCue also brings to Microsoft extensive experience in operating a software-as-a-service business.
Microsoft built its business selling software that runs on a computer's hard drive and it is moving to adopt elements of the online services movement to deliver software as a service through the Web browser.
It's a business model long embraced by Google and other Internet companies, but somewhat new territory to Microsoft. Continued...
