Comments on: Microsoft Acquires Tellme

By: Alfred Lin Has The Midas Touch: The Man With $2 Billion In Acquisitions Under His Belt | Design Website Blog

Wed, 29 Jul 2009 02:12:51 +0000

[...] joined the company was losing $60 million per year, he tells me. Microsoft bought the company for $800 million in [...]

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By: Alfred Lin Has The Midas Touch: The Man With $2 Billion In Acquisitions Under His Belt | Technology

Wed, 29 Jul 2009 01:03:30 +0000

[...] joined the company was losing $60 million per year, he tells me. Microsoft bought the company for $800 million in [...]

By: Alfred Lin Has The Midas Touch: The Man With $2 Billion In Acquisitions Under His Belt | Funny Video Forex Gadget Hi-tech

Tue, 28 Jul 2009 18:48:23 +0000

[...] joined the company was losing $60 million per year, he tells me. Microsoft bought the company for $800 million in [...]

By: Alfred Lin Has The Midas Touch: The Man With $2 Billion In Acquisitions Under His Belt | Stoth

Tue, 28 Jul 2009 18:29:17 +0000

[...] joined the company was losing $60 million per year, he tells me. Microsoft bought the company for $800 million in [...]

By: Alfred Lin Has The Midas Touch: The Man With $2 Billion In Acquisitions Under His Belt

Tue, 28 Jul 2009 18:08:57 +0000

[...] joined the company was losing $60 million per year, he tells me. Microsoft bought the company for $800 million in [...]

By: Complete List of 2007 Web / Technology Acquisitions » The StartUp Blog at PartnerUp

Thu, 09 Apr 2009 20:50:59 +0000

[...] Networks is a voice services company specializing in speech recognition. Press Release | TechCrunch | GigaOm| Mashable | [...]

By: This Week in Acquisitions: Microsoft and Cisco Systems

This Week in Acquisitions: Microsoft and Cisco Systems — Tue, 16 Dec 2008 07:05:16 +0000

[...] Microsoft had announced that they had acquired TellMe. TechCrunch had speculated and then later confirmed the rumor and it was made official by a Microsoft press [...]

By: The Praized Blog » Blog Archive » Microsoft to Buy Yell?

The Praized Blog » Blog Archive » Microsoft to Buy Yell? — Tue, 27 May 2008 14:58:22 +0000

[...] in the local search space in the last 12 months through tech acquisitions (notably Fast and TellMe). This might be the way to try to corner the local search market vis-a-vis [...]

By: MobileCrunch » Tellme Launches Free 411 Service

MobileCrunch » Tellme Launches Free 411 Service — Tue, 17 Apr 2007 18:18:17 +0000

[...] TechCrunch recently reported that Microsoft had acquired Tellme Networks, Inc. Tellme claims responsibility for answering nearly 80-percent of the automated 411 calls in the States. The acquisition goes into effect on April 30. Categories: Analysis, Google, hot, Microsoft, Tellme, 411, information | Bookmark this post with del.icio.us [...]

By: Tellme Launches Free 411 Service

Tellme Launches Free 411 Service — Tue, 17 Apr 2007 18:17:27 +0000

[...] TechCrunch recently reported that Microsoft had acquired Tellme Networks, Inc. Tellme claims responsibility for answering nearly 80-percent of the automated 411 calls in the States. The acquisition goes into effect on April 30. tr { border: 0px } td { cellborder: 10px} table { border: 1px solid black } [...]

By: Daniel eDer

Daniel eDer — Mon, 26 Mar 2007 11:05:18 +0000

I bet microsoft wanted to buy nuance a couple of times.
Apparently, tellme has some voice technology which nuance doesn’t.

By: joe

joe — Sat, 17 Mar 2007 04:40:14 +0000

I heard the employees own over two thirds of the company despite the amount of money they raised. They must have gotten incredible terms from the VCs in 99 and 2000. Good for them if true.

By: eli

eli — Fri, 16 Mar 2007 14:22:27 +0000

i heard that the acquisition price was $775 million from sources in both companies. Om is off the mark this time…

By: karl

karl — Fri, 16 Mar 2007 03:24:00 +0000

Wow. That’s about the dumbest thing I’ve heard in a while.

http://www.dvd-to-psp.com

By: inside info

inside info — Thu, 15 Mar 2007 19:15:19 +0000

Krishnan,
There are other elements to post-acquisition compensation that go beyond just options grants. Specifically, most employees receive a retention bonus to stick around for a year or so after the acquisition and new stock grants as employees of the acquirer. I believe that retention bonuses are not priced into the acquisition price, so Microsoft could, in theory, provide the employees with incentive to stick around. Also, depending on how valuation increased, employees that just joined may not have received a very large bump in share price through the acquisition.

Anybody have any insight into that?

By: David Scott Lewis

David Scott Lewis — Thu, 15 Mar 2007 06:37:19 +0000

I recall from my Microsoft days that Microsoft had/has a very rational acquisition strategy (i.e., very financially rational strategy): Buy companies that will likely increase shareholder value (i.e., Microsoft’s stock price) by more money than what they spent on the acquisition. In other words, Microsoft gets a free acquisition. Okay, it’s not quite this simple, but this is the gist of it — and it’s a brilliant strategy. I’m sure this rationale played a roll if TellMe was acquired for nearly $1 billion. It played a roll with WebTV, Hotmail, VXtreme, Great Plains, yada, yada, yada …

Good for Microsoft. BTW, Google seems to use the same strategy. OTOH, I have no idea which strategy Yahoo! uses: Their acquisitions almost never seem to help their stock price. Maybe it’s some sort of Yahoo-kiss-of-death syndrome.

By: David Mackey

David Mackey — Thu, 15 Mar 2007 03:30:09 +0000

Wow. Thats a pretty hefty purchase. Haven’t even heard of TellMe though?

By: Krishnan

Krishnan — Thu, 15 Mar 2007 02:32:44 +0000

@Chris,

You make an interesting point that VC’s can have significant liquidation preferences which would give them a large percentage of the purchase amount. However, in those cases, the common stock would have little to no value – meaning that employees only have salary as an incentive to remain. Since presumably MSFT would want to retain some of the key employees I would assume that common shareholders (and option holders) have retained some value.

By: Chris

Chris — Thu, 15 Mar 2007 01:42:03 +0000

Thanks,

I was under the impression that most VCs are looking for a 10x return … and if they put in 200 mm+ already, I would have normally assumed that most of the 800 would go to them … ?

By: Gern Blanston

Gern Blanston — Thu, 15 Mar 2007 00:40:29 +0000

Most/all regular (salaried) Tellme employees (not contractors) were granted stock options when hired, and the vested options will be redeemed for cash at some point after the deal closes (I’m not at liberty to disclose the exact price, but if you divide $800M by the number of outstanding Tellme shares you’ll get a pretty good idea). I was hoping for a price about twice that of the actual, but I’m a greedy bastard with a hefty mortgage that I can’t afford.

In truth, any exit event that allows all employees to redeem option grants for a price significantly above that which they paid should be considered a success. In my case I paid US $0.01 for most of my options, and was allowed to early exercise when I joined the company five years ago, so I’ll be getting long-term capital gains treatment (and hope to avoid AMT, but that’s another pipe dream). The unvested option grants of current Tellme employees will be converted to MSFT options with, in all likelihood, an identical vesting schedule, but I don’t know the details of that exchange (I no longer work at Tellme).

To Chris’s question in comment 6, there is no typical formula you can apply here. Each exit event is a little different. Some take care of the employees and others do not, but VCs and early investors always come first — it’s the ol’ MCM’ circuit, you know.

Gern

By: Dwayne

Dwayne — Wed, 14 Mar 2007 23:57:39 +0000

I think there is enough there to go around for the VC’s, founders, and some of the early employees in the company.

By: chris

chris — Wed, 14 Mar 2007 23:01:30 +0000

Can someone with experience tell me approximately how much would go to whom in a typical acquisition like this?

Would th VCs get everything, or would there be something left for the employees?

By: TagMan | Tellme TagMuse Test

TagMan | Tellme TagMuse Test — Wed, 14 Mar 2007 21:59:33 +0000

Tellme TagMuse Test …

One of the new tags I\’m seeing via TagMuse is tellme……

By: Anthony Barba

Anthony Barba — Wed, 14 Mar 2007 21:28:32 +0000

I just re-listened to the Interview With Jingle CEO on TalkCrunch because I thought they were using TellMe, but they are not, they are using Nuance. I guess Microsoft can use Tell Me to do the same thing as free411.com with Live Local. Also there is revenue coming in from licensing this to AT&T, Fandago etc.