Microsoft close to buying voice-recognition company, Tellme

Microsoft is negotiating to buy Tellme Networks, a Mountain View, Calif. company that offers voice-recognition technology, and could sign something as early as this week, according to multiple news reports.

A Microsoft agreement to buy Tellme could value the company at up to $800 million, according to the WSJ.

From the WSJ:

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The acquisition would fit Microsoft’s broader ambitions to build Web-based voice capabilities into its own products. Businesses and consumers have lately begun turning to the Internet to do things they once did using boxed software. Rivals such as Google Inc. have pressured Microsoft in some areas, such as email and word-processing, but Web-based voice services are still a relatively new field.

Microsoft could benefit from Tellme’s relationships with companies like FedEx Corp. and AT&T Inc., which use Tellme technology to offer voice-based phone services to their own customers. It could also build Tellme’s technology into other products — for instance, allowing users of handheld devices running on Windows Mobile software to search the Internet using voice commands.

We wrote about Tellme’s own mobile search offering. Tellme has raised at least $263 million in venture capital from Kleiner Perkins Caufield & Byers, Benchmark Capital, Amerindo, Pantheon Ventures, Van Wagoner Capital Management, Barksdale Group and AT&T.