MSFT Confirms Tellme Acquistion

Here’s the release. Here are my previous posts on Tellme and mobile local search. Bringing more usability to mobile search in particular — and differentiation to MSFT — is a key to this acquisition.

But it remains strange because MSFT has considerable speech processing assets and conceivably could have built everything that Tellme is bringing to the table itself. But the company must’ve felt that at least from a consumer perspective Tellme was stronger or farther along.

Mobile search, though increasingly competitive, is still relatively wide open. He (or she) who has the best user experience will win the consumer and later the advertising dollar. Speech is certainly not infallible, but Tellme is doing it as well or better than anyone out there. And the company’s Tellme by Mobile is a working version of a “voice in, display out” model that offers the potentially best mobile search user experience today.

Other services such as 877-520-Find (unconfirmed Google DA service) and 1-800-Free-411 (Jingle) have voice in/text out capabilities too. This is probably the mass-market mobile search model, more than search on a WAP browser. But presumably MSFT wants to voice-enable all mobile applications including Live Search for mobile.

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Even though Tellme’s enterprise business is lucrative, Microsoft’s Don Dodge posts that mobile search is the basis for the acquisition.

The Kelsey Group was pre-briefed on the acquisition and has some interesting speculation about the implications. I’ll be talking to Microsoft shortly.

Here’s the short WSJ article on the acquisition. There’ll be a “day two” story later tonight or tomorrow.