Wireless Watch: Speech impediments
By Dan Briody
Redherring.com, November 15, 2000
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I`m prone to occasional bouts of panic. And lately I`ve been feeling a tremendous amount of anxiety about the prospects of certain wireless technologies. I`m sure the stock market nosedive on Monday didn`t help my condition any, but the real source of my concern is based on the future of speech-recognition technology. I`m convinced that the success of a great number of wireless services, which will drive device sales and subscription rates, depends on the ease of use that speech recognition will provide users. It seems the news coming out of the speech camps has not been promising as of late.
If you haven`t been following the dramatic events surrounding Lernout & Hauspie Speech Products (Nasdaq: LHSP), the Belgian maker of speech-recognition software, in The Wall Street Journal over the past two months, I suggest you get yourself an online subscription, search the archives, and read in chronological order this made-for-television docudrama about how a powerful newspaper brought a once-promising technology company to within an inch of its life. I`ve included links to the most recent two installments of this miniseries to get you started.
Lernout states it had "errors" in accounting
Former KPMG auditor works for Lernout
Of course, the last party that should be blamed in this ongoing saga is The Wall Street Journal. The real plot of this story concerns how Lernout & Hauspie, the longtime leader in the speech-recognition industry, went to great lengths to overstate revenues -- going as far as fabricating customers out of thin air -- and is now feeling the pain. At last check, both the "L" and the "H" in L & H had been shamed into resigning their executive posts, trading of its stock on the Nasdaq had been halted for almost a week, and the company was working to restate its "earnings." Lernout`s advertising tag line is "We have the world talking." Boy, does it ever.
But the thing that no one is talking about is, why did Lernout feel the need to fib and jigger its numbers? Is the speech-recognition market that bad? Or is this just an isolated event? So I set out this week to try to sort it out hopefully calm myself down in the process.
SIGNS OF LIFE
The first encouraging sign I got was the news that Infospace (Nasdaq: INSP), which I consider to be a key player in wireless services, had bought a Montreal-based speech-recognition company by the name of Locus Dialogue. It seemed promising that companies were still investing in speech startups. And Infospace is smart money, which allayed my fears further still.
Infospace adds speech recognition with latest buy
That was a good start. The next uplifting news I found was that of plans by Sprint PCS (NYSE: PCS) to start some voice-browsing trials, using software from another promising speech company, BeVocal. Add that to BeVocal`s earlier win with Qwest Communications (NYSE: Q) and Tellme Networks`s deal with AT&T Wireless (NYSE: AWE), and I thought to myself, if the carriers still believe in this stuff and are moving forward, then it must be on track.
(Im Rest dreht es sich um Sprachfirmen, oben jedoch ein großes Lob an INSP
)Sprint PCS to test voice-portal services (New York Times on the Web, subscription required)
TAKING STOCK
That was about the time I ran into a minor setback. I set out to look at some of the public companies in the speech space -- with the exception of Lernout, of course -- and see how their stocks had performed over the past year. When I examined the stock chart for Boston-based Speechworks (Nasdaq: SPWX), I felt queasy just looking at all the peaks and valleys, particularly the precipitous 34 percent drop in just the past two weeks. But the company just went public this summer, and it has garnered two major wins with Yahoo (Nasdaq: YHOO) and America Online (NYSE: AOL) since that time. So with my spirits a bit buoyed by that knowledge, I pressed on.
Nuance Communications (Nasdaq: NUAN) presented a much better story. Since going public in April (yes, the same April that sucked the life out of the Nasdaq), the company`s stock has performed handsomely, increasing about 300 percent. Add to that some promising news in a deal with Ask Jeeves (Nasdaq: ASKJ), and I was starting to feel downright positive about the future of speech technology.
Ask Jeeves to voice-enable service
One of the reasons I`m so edgy when it comes to speech is because we`ve heard so much, for so long now, about how these technologies are going to change the way we interact with computers that I`m beginning to doubt whether the dream will ever become reality. Everyone in the industry agrees that it`s important, but people used to say that about video conferencing too, until we all got fed up with that nonsense and decided to move on. Now it seems like no one is interested in video conferencing anymore, and the excitement has completely worn off.
I sincerely hope that doesn`t happen with speech technology and that the companies mentioned above can get this important innovation over the goal line. Judging from the encouraging news coming out about the industry, I think they can get it done. They`d better, because it doesn`t look like we`ll be able to count on Lernout anymore.
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Yours digitally
KiKo