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Promotes telephony access to the Web

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Microsoft has acquired speech-recognition specialist Entropic for an undisclosed sum. Microsoft already has a $60 million investment (some 7 per cent) in Lernout & Hauspie whose activities overlap to a certain extent, but it was enough to make L&H's share price dive 7 per cent on Friday after the news was known, and to open lower this morning. The spin being put on the acquisition by CEO Gaston Bastiaens is that Microsoft wanted speech engineers, so went out and bought them, since they are in demand and hard to recruit. He also noted that it is in L&H's interest that a voice interface becomes standard in Windows as soon as possible. Entropic has around 40 people in its Washington DC headquarters at the Entropic Cambridge Research Laboratory which was formed in 1995 as a joint venture. ECRL is a commercial conduit for Cambridge's Speech, Vision and Robotics Group, headed by Professor Stephen Young, Entropic's chief scientist. Let's hope that the taxpayers benefit from this cosy arrangement. The ominous news from ECRL is that "All current Entropic tool kits/SDK products have been withdrawn from the market" and that customers with maintenance contracts will get a prorated refund. Entropic has developed UNIX/Linux- and NT-based speech processing schools. We asked Brian Corbett, the MD of ECRL, whether this meant that UNIX development would now stop but he would not be drawn. This is about as eloquent a response as is needed to assume that Microsoft is pretty happy to extinguish further UNIX development. Paul Finke, CEO of Entropic, said that the Microsoft acquisition "would enable us to execute our strategy, allow our technology to reach a larger market and do so more quickly than would have been possible had we remained a standalone company". That also sounds like Windows-in, UNIX-out. The Washington DC office will close, and staff willing to go to Fort Redmond will be given that opportunity. Nathan Myhrvold, former head of Microsoft Research until he went walkabout, said a year or so ago that his group had completed the development of speech recognition software and that it would be included in MS Office. Now Microsoft is saying that Entropic's expertise will "complement Microsoft's ongoing efforts to enhance its speech-enabled applications" and Microsoft's speech application programming interface (SAPI). It seems as a major thrust will be for telephony access to the Web, according to "excited" Entropic founder John Shore. Another interpreatation of the deal is seen in Microsoft's statement that it is offering "a broad range of speech recognition and synthesis engines provided by various third-party speech vendors". This hints that Microsoft may try to acquire or further control other vendors like Dragon and more of L&H as a move towards wrapping up most of the action outside IBM. In addition, Microsoft probably hopes to perk up the slowing US momentum for home computers with the gimmick of speech recognition, but regional American accents may prove too much even for the Cambridge Brits. ®

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