What Could Tellme Bring to Microsoft’s Table?

Rumors are swirling about a potential Microsoft acquisition of Tellme Networks. The latest is a Wall Street Journal article (sub. req’d) that reports a possible sale price of US$800 million (here is coverage from TechCrunch if you don’t have a WSJ sub).

Whether or not this is true, it’s clear that Tellme is a strong (and profitable) company in the rapidly growing wireless voice search area, which could provide a great deal of value for Microsoft’s mobile local search initiatives (past writing on the company is here and here). It also has some nice tie-ins to existing MSFT products, and there are possibilities of channeling Tellme’s technology toward more enterprise applications (it currently powers the voice search applications of American Airlines, FedEx, Orbitz and others).

Om Malik mentions a notable Steve Ballmer quote from a Journal article a few months back:

“The leading edge battleground between us and Google in local search really will come on the phone,” said the CEO.

This is interesting and could go a certain distance in explaining the rumored price tag (the fourth largest in MSFT’s history). Tellme would bring the ability to integrate voice search into the Windows Mobile software platform, giving MSFT an edge in mobile local search over its search and portal competitors.

Voice search is also a more user-friendly form of mobile local search that could push overall adoption forward, given Windows Mobile’s installed base (see TKG Advisory “Wireless Voice Search: The Multi-Modal Revolution“).

We’ll have to wait to see if the rumors are true. In the meantime, treat it as just that, a rumor, perhaps worthy of speculation but deserving of caution.

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