Ed Sim writes following Microsoft’s acquisition of Tellme:
I remember when I started in the VC world over 11 years ago, the question we always had to ask ourselves before we made an investment was “what is Microsoft doing or going to do?” As I reflect on the last decade, I never really did think that as an investor in software and the Internet that the question would become almost irrelevant and would change to “what is Google doing or going to do?” Given all of the discussion about Microsoft being dead, I must say that while they are still a distant third in the search space, they did make a brilliant move in acquiring TellMe. While most of the revenue does come from TellMe’s hosted speech applications for customer service, the big value in the long run will be Microsoft’s ability to incorporate TellMe’s mobile search and voice-driven search through the mobile handset. In other words, it seems that while Microsoft is not conceding to Google in search, that it does recognize that the mobile opportunity is potentially much larger and that this acquisition will clearly give it a big lead in the mobile space. Think about it – when you leave home, you grab your keys, wallet, and cell phone. The opportunity to reach and market to this third screen is huge and just in the first inning.