Updated: Apple Buys Personal Assistant iPhone App Siri

Siri Gets bought by Apple

Apple’s not hesitating to put a dent in its gigantic cash horde.

A day after the New York Times reported that the Cupertino, Calif. company bought Intrinsity, a small chip company known for making a faster processor that uses less energy, Apple (NSDQ: AAPL) has purchased Siri, an iPhone application that acts as a personal assistant on the phone. Of course, both deals follow Apple’s purchase of Quattro Wireless, a mobile ad network.

The Siri deal was first discovered by Robert Scoble, who spotted an obscure document on the FTC web site. Apple did not return requests for comment. UPDATE: Two of Siri’s board members, Shawn Carolan of Menlo Ventures, and Gary Morgenthaler confirmed the sale in an interview with mocoNews.

Siri’s current application is built for the iPhone 3GS and the iPod Touch in the U.S., and is pitched as a “virtual personal assistant,” which allows you to search for the closest Sushi restaurant, ask what’s playing at Carnegie Hall, or look for a nearby movie theater or gas station. So far, the company has integrated 40 service providers into the application.

The company is not a voice-recognition company. In fact, it licenses that technology from Nuance Communications. Rather, it bills itself as Artificial Intelligence. The company’s background is a bit unusual. It was started as a five-year project at SRI, a research institute that brought together 22 top-notch universities and DARPA to create artificial intelligence for the battlefield, so that commanders can assemble information in real-time to make decisions. The U.S. military still uses it today, but in 2008, SRI worked with VCs to spin-off a team that would have exclusive rights to commercialize the technology. Apple now owns those exclusive rights.

In its short history, Siri, which has 26 employees, raised $23.5 million in funding. When Apple called, it was not currently raising funds, or looking to be sold, Morgenthaler said. Rather it had just secured additional cash from the Li Ka-shing Foundation, known for having a $120 million stake in Facebook.

It’s unclear how Apple will integrate the technology into their offerings, and neither Morgenthaler or Carolan were allowed to comment on Apple’s future plans. However, they were able to say where Siri was headed next with the technology. For now, the mobile software along with server software takes natural language commands to anticipate the users’ intent. But with more intelligence, such as addresses, credit card numbers and logins, more actions can be executed on the behalf of the user — rather than limited to hailing a cab, or finding out the weather.

What the company isn’t, they say, is a search engine. Carolan: “Siri is not a search engine in any form, nor is it in direct competition with Google (NSDQ: GOOG) or anyone else. Siri is a vehicle to execute transactions.” The business model was to make money from referrals, not advertising. Morgenthaler: “What Siri gives you is the natural language and domain expertise. This is a fundamental new paradigm for mobile user interaction. Apple is the ideal company and vehicle to take the company to the marketplace, I couldn

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