What it is: Microsoft's newest acquisition. The speech-recognition company is expected to be critical to helping Microsoft bridge voice and data -- particularly when it comes to mobile search, helping it get a leg up where it trails Google. Tellme launched in 1999 and has a long track record of handling automated call centers and directory assistance for major companies. In fact, 40% of all directory-assistance calls are made through Tellme.
Killer app: The application, launched in beta last month, has been lauded by everyone from John Battelle to TechCrunch's Michael Arrington as a killer app for jump-starting mobile search. Users install the software on their phones (it works with several Sprint and Cingular models) and, holding down the talk button, dictate the business and location they are looking for. The information pops right up on the screen. No typing necessary. Users can also search by business type, for example, "pizza" or "shoe repair." Other perks include interactive maps and step-by-step directions.
The category: Free directory assistance is catching on in a major way. Since ad-supported player Free 411 was detailed in this column back in June 2006, its market share has grown to 6% of total directory assistance.
The ad angle: Services such as free directory assistance, especially one that doesn't require typing, are well-poised as ad vehicles since they offer a service as an incentive, which is critical to getting people to adopt mobile advertising. It's not hard to envision marketers buying targeted words down to the geographic level.
The big picture: The acquisition also indicates that Microsoft is quite happy to acquire what it seems unable to build -- or build fast enough. And it's a major investment: Analysts and media are pegging it at between $800 million and $1 billion.