Nuance Communications Inc. continued to thin the speech-recognition herd, snapping up VoiceSignal Technologies Inc. in a deal valued at nearly $300 million.
The company said it will fork over 5.8 million Nuance shares as well as $204 million in cash for privately held VoiceSignal, a fellow Massachusetts-based developer. The acquisition, which is slated to close by the end of the year, will add $55 million to $57 million in revenue, Nuance said.
Long hailed as a potentially huge revenue source, speech-recognition technology is only now gaining traction in wireless. Developers and operators are hoping to spur data usage by allowing subscribers to use speech to navigate through cumbersome carrier decks instead of triple-tapping messages and clicking endlessly.
“Mobile is growing faster than the rest of our business,” said Peter Mahoney, VP of worldwide marketing for Nuance. “Mobile is growing at 30 percent, while our overall business is growing at about 20 percent.”
Acquisition trend
Nuance recently picked up rival BeVocal for $140 million, and last year bought out Dictaphone for $357 million. The VoiceSignal acquisition will help Nuance embed its offerings on more handsets across more networks, Mahoney said, optimizing the software for each device.
“The speech business is unique in that it’s very language- and platform-dependent, especially in mobile,” he explained. “It only works for you if it works on your phone, in your language and through your carrier.”
Nuance isn’t the only one betting heavily on speech-recognition technology: Microsoft Corp. earlier this year picked up Tellme Networks Inc. in a deal rumored to be worth as much as $800 million, and several smaller players are continuing to draw investment capital.
“By combining forces with Nuance, we can accelerate the realization of our common vision for mobile handsets: to eliminate the input bottleneck from small, mobile device keypads and make accessible to users the full power of mobile devices,” said VoiceSignal CEO Rich Geruson. “Joining Nuance’s assets with our capabilities in mobile positions the company well in the . market of mobile search, where a voice interface will be the key to unlock its potential.”
Google looming
Google Inc. continues to move aggressively in the space, too, showcasing a voice search service that delivers local business listings to fixed-line and mobile users. Onlookers say the Internet behemoth may move to snap up V-Enable, Promptu, or another of the few independent players left on the field.
Expect Nuance to stay busy on the acquisition front, as well, Mahoney warned.
“We’re really good at consolidation,” he said. “We’ve done a lot of acquisition activity over the years, and we’ve really fine-tuned the model.”
