Microsoft just sent out a press advisory confirming that it is buying TellMe Networks. More details to follow after the press conference which begins in a few minutes. But here are some nuggets which our sources have sent our way:
1. The price is over $800 million but below a billion dollars. Microsoft and Tellme are not disclosing financial details.
2. While Microsoft has been trying to position Microsoft Business Division President Jeff Raikes as the guy who took the lead on this deal, the truth is that Microsoft CEO Steve Ballmer was personally handling this deal. I have confirmed this with two people.
3. Mobile search is the impetus behind this deal, but TellMe is making over $100 million a year from selling automated call-center services to large companies like FedEx.
4. TellMe is going to become an independently run subsidiary of Microsoft.
5. Mike McCue and other senior executives are going to stay with the company. McCue worked at Netscape. Microsoft destroyed Netscape, and now Steve and Bill are making amends, it seems ;-)
Benchmark Capital is the largest outside shareholder in Tellme. By the way, this is another successful exit for The Barksdale Group, a venture fund started by Netscape refugees and their friends. Index Ventures’ Danny Rimer, now the new king of Euro Capital was one of the folks involved with TellMe. Another TBG alumnus, Quincy Smith is now running CBS Interactive, and perhaps teaching the old guys a hip-hop beat or two!
24 comments so far
10:22 AM PT
Does anybody know how the investors, founders and employees all made out in this deal?
230+ million is a lot of money to raise. Not sure if it was all in up-rounds, but it seems like the VCs involved probably took a large chunk of the company.
If the company is profitable, did the investors recoup part of their investment through a dividend?
11:09 AM PT
good stuff om. as a shareholder in nuance, i am interested to see how this plays out.
1:17 PM PT
[...] in the $800 million range, is undisclosed. The WSJ says “up to $800 million” and Gigaom is saying “over $800 million but below a billion dollars.” My bet is that GigaOm has [...]
1:25 PM PT
Just wondering what other Barksdale funded companies are still out there, or was this the last great hurrah for them after closing in 2002?
2:59 PM PT
JP,
Not sure if any of their other investments have legs. regardless it is still a decent enough return, and a home run for Benchmark -
2:59 PM PT
I am betting this is going to mean more royalty payments to nuance as microsoft tries and pushes it into the mobile handsets? Just a guess - if i hear anything will update the post!
4:44 PM PT
[...] Microsoftが今朝（米国時間3/15）、Tellmeの買収を発表した。この2週間ささやかれ続けていた噂は本物だったことになる。8億ドル（$800M）前後になるだろうという大方の予想だが、買収額は不明。WSJは「最大でも8億ドル（$800M）」と報じたが、Gigaomは「8億ドル（$800M）は超えるが10億ドルには届かない額」と書いている。私はGigaOmの情報が確かな方に賭けたいね。Tellme経営陣の中核メンバーは取締役のまま残留となる見込み。 [...]
6:40 PM PT
[...] in the $800 million range, is undisclosed. The WSJ says “up to $800 million” and Gigaom is saying “over $800 million but below a billion dollars.” My bet is that GigaOm has [...]
6:55 PM PT
thanks om.
Long NUAN and we just wallstripped it
6:11 AM PT
it seems Ballmer was hell bent to make Nolan Myers work for Microsoft :)
great news for me and great post OM .
11:09 AM PT
[...] Malik had an interesting analysis about some of the things regarding the Microsoft Tellme deal. Considering the $800M price tag, it [...]
10:48 AM PT
If this is indeed mobile search related,it just confirms my suspicions that the first wave of mobile search “let’s put our logo+brand up there and have them type the keywords like they are used to” is indeed, despite the commercial-interest-fueled-hype, a big failure.
A phone is not a PC, never was and never will be.
2:39 PM PT
I am sure the VCs were happy to get something out of this. Tellme could have IPO’d in 2000 or even 2004 to a much higher valuation. Now, although profitable, their revenue growth has stalled (411 calls, which drive most of their revenue, will continue to decline due to free411 and other non-voice substitutes). Customer service has never been a huge business for them and there is too much competition (they are losing big accounts as airlines and banks build VXML expertise). Their cost structure is also higher given their lack of an on-premise solution (every call needs to be routed to their platform). The mobile search product is just a beta. Not sure that an acquisition was the smartest route here for Microsoft.
10:01 PM PT
Rumor is they (VCs) had 4x preferences on the deal.
8:59 AM PT
[...] it’s a great service that works really well (except on speakerphones). The purchase price was between $800 million and $1 billion, and TellMe will remain an independantly run subsidiary of Microsoft. Potential areas of [...]
6:35 AM PT
[...] the GigaOm blog post: Mobile search is the impetus behind this deal, but TellMe is making over $100 million a year from [...]
1:38 PM PT
[...] ink on the Microsoft-TellMe Networks deal isn’t even dry, and we are already seeing some key executives leaving the company. Gary [...]
4:07 PM PT
[...] And at the same time, Microsoft purchased TellMe for a measly $800 million. TellMe is a voice recognition mobile search application that Microsoft hopes will replace the need to call 411. TellMe’s technology last year also made $100 million running large call centers like FedExR…. [...]
9:37 AM PT
[...] recently acquired by Microsoft to enter the Free411 market. The price tag was rumored to be around $800 million. Tellme claims to answer 80% of the automated 411 calls in the U.S., serving 40 million users each [...]
3:29 PM PT
[...] software, and the deal was driven by Steve Ballmer himself, according to both News.com and GigaOm. Speech recognition software has been a pet project at Microsoft for a long time (Bill Gates has [...]
5:58 AM PT
[...] has it’s 411 Service. Microsoft recently bought Tellme, a speech-based Internet services provider to power Local Search. For those of us who’ve [...]
8:50 PM PT
[...] на системах распознавания речи. Пресс-релиз | TechCrunch | GigaOm| Mashable | [...]
10:07 AM PT
[...] whopping valuation makes a bit more sense if you consider that players ranging from Microsoft (it bought TellMe) to Nuance Communications (it’s bought a lot) are all trying to crack the speech-to-text [...]
2:05 PM PT
[...] whopping valuation makes a bit more sense if you consider that players ranging from Microsoft (it bought TellMe) to Nuance Communications (it’s bought a lot) are all trying to crack the speech-to-text [...]
Leave a Comment