James Siminoff, Ditech Chief Strategy Officer (and former SimulScribe CEO), says that this is the first fully automated voicemail-to-text service that can operate behind the firewall. Most services, he says, rely on some degree of human transcription for accuracy, which makes them unsuitable for organizations that deal with sensitive information (a competitor called Spinvox has been in hot water for using humans to transcribe text that was supposed to be automated, leading to an uproar over privacy issues). PhoneTag’s fully automated solution is capable of around 85% accuracy, which makes it a viable solution for businesses that don’t want their voice messages routed outside of the company. PhoneTag also offers a human-powered service for users who aren’t handling sensitive information, which can get up to 97% accuracy.

The PhoneTag technology comes from a startup called SimulScribe, which recently signed an exclusive partnership with Ditech worth as much as $17 million.

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SimulScribe, the scrappy voicemail transcription company, didn’t get acquired exactly, but it just signed an exclusive partnership agreement with Ditech Networks that could be worth as much as $17 million. The deal is $7 million in cash up front with a $10 million earnout, and gives Ditech the exclusive rights to resell SimulScribe’s speech-to-text transcription services on a wholesale basis to telephone companies and developers. SimulScribe CEO James Siminoff will become the chief strategy officer of Ditech, and his co-founder Mark Dillon will also work there.

It is a decent outcome for a startup that raised only $5.7 million and is already profitable on sales of about $4 million, according to SimulScribe CEO James Siminoff. But competition is intense, with Spinvox on the one hand, which has raised an insane $200 million, and Nuance on the other, the speech-recognition behemoth which is nearing $1 billion in sales. SimulScribe offers its own voicemail-to-text service called PhoneTag, which has about 20,000 paying subscribers, and reaches about 80,000 more subscribers through wholesale partnershps with Vonage and British Telecom.

The big play is getting those deals with carriers, but with only 7 employees, SimulScribe didn’t have the resources or manpower to go after those deals. Ditech already has equipment sitting in nearly every major carrier’s network. It sells voice processing software that minimizes background noise on calls to the telephone companies. Adding a new service is a software upgrade. Ditech will resell SimulScribe’s service to its existing telephone carrier customers.

The companies will also combine their two technologies for more accurate transcriptions. Background noise is one of the biggest contributors to auto-transcription mistakes Simulscribe still supplements its transcriptions with humans, but the more accurate the auto-generated text is, the easier it is to fix.

If major telephone companies start adopting voicemail transcription services, it could quickly grow from what looks like it might be a $100 million market this year to a $1 billion million market. A lot of this adoption is being driven by a fear of Google, or more specifically Google Voice. Converting voicemails to emails is one of the great features of Google Voice, but its auto-transcription still needs a lot of work. Google Voice is using a homegrown speech recognition system developed for the GOOG-411 free directory information service (which is why it is not so great for conversational speech). But at least Google Voice is waking up carriers to the fact that the only thing voicemail is good for these days is converting it into emails so you don’t have to listen to them.

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RebelVox is a voice communications platform that aims to makes your voicemail function more like email. The technology is not yet available for consumers, but it will soon be shopped around to developers who may want to incorporate it in other apps. RebelVox’s technology will allow you to leave a voicemail for someone without actually making a call to the person. RebelVox’s mobile app will let you make a voice recording that is delivered as a message to your contact both through a mobile application and their email account. Your contact will be able to respond via another voicemail message, text message or email. You will be able to pick up a voice message from a friend while they are leaving it and speak to them live as well. RebelVox also has linking software built for the PC and Mac which will allow users to control the messages through their computer as well as their mobile phone. RebelVox’s technology can be woven seamlessly into most email accounts, including Gmail, Yahoo Mail, AOL and Outlook.

Basically, RebelVox wants to let consumers interact with voicemail much like they would an email – something that badly needs to happen, because it its current form, voicemail needs to die. Currently packaged as software, RebelVox is still exploring how it wants to sell the licensed (and patented) software and how much it would like to sell it for. The company’s co-founder, Tom Katis, says that RebelVox is in talks with both mobile phone companies and third party mobile application. The service contains features similar to Google Voice, SpinVox, and PhoneTag, especially the ability to control the interface through your computer. RebelVox is certainly no replacement for Google Voice, but offers some features that could be a nice add-on, such as the ability to send voice messages without making a call.

This video gives a comprehensive explanation of the technology and how it would work on a mobile device:

The video shows the application being deployed on the iPhone, and it looks like it could be a really cool tool. It almost seems like it turns your phone into a walkie-talkie in some ways. Katis says that the software is ready to be deployed on any mobile device. The interface seems to work well on the larger screen of the iPhone but I’m not sure how user-friendly it would be on a smaller Blackberry or mobile device. Also, the concept of voice messaging isn’t new. Bubble Motion and Pinger are also allowing users use voice messaging over mobile devices. But Katis insists that RebelVox is different because it is a software, not an application, and it eliminates the wall between live conversations and messaging.

Another company that lets users direct their calls straight to voicemail is SlyDial.

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People use it to send voice-to-text emails and sms messages, send Twitter messages, add calendar items, etc. Voice messages are transcribed into text via software with humans to clean things up.

The free version of Jott is going to end on February 2, CEO John Pollard told me today. The terrible advertising market, he says, means every customer has to pay their own way from now on. Customers will need to pay $4/month to continue the service, the current price for a premium account. This includes users of the Jott iPhone application.

New Voicemail To Text Service

Jott is also preparing to roll out a new service, voicemail-to-text. Like competitors Spinvox, PhoneTag, GotVoice and others, voicemails will be converted into text messages and sent to you within a couple of minutes. The application is priced at the same level as competitors, $10/month for up to 40 messages. The product launches today.

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When I first started out in the real world in the mid-nineties voicemail was an important productivity tool. I remember people talking about the pros and cons of various enterprise voicemail systems – which had the best forwarding and group messaging, which allowed for archiving, and how many messages could be stored and for how long. Even though email was around, people were still unsure how to use it. Letters went on letterhead and were formal. Voicemail was informal and common. Email etiquette was still being developed. It was good for mass-forwarding jokes and moving Word, Excel, and Powerpoint files around, but it took a while for email to take over as older generations moved out of the workplace or got with the program.

But now an increasing number of people are just plain avoiding voicemail (for my impromptu and unscientific survey, see the comments here, which are predominantly anti-voicemail). It takes much longer to listen to a message than read it. And voicemail is usually outside of our typical workflow, making it hard to forward or reply to easily.

Typical voicemail messages today include things like “Please don’t leave me a voicemail, I rarely listen to them. Please just email me at xxxx@xxxx.com” Many people don’t bother setting up their voicemail accounts at all. Then there’s my favorite method, the one I use personally – let the message box get full and then don’t empty it. Caller ID still tells me who called, and I can simply call them back.

How many times have you called someone back and said “I saw that you called but didn’t listen to the voicemail yet, Is it anything urgent?”

Senders often feel guilty for leaving voicemails, too. And to make sure you get the message, quite often people will follow up with a text message – “Just left you a VM, it’s important” – just so you know it’s there.

There are startups that are trying to make voicemail more useful. Pinger, GrandCentral and YouMail are among them. The iPhone’s visual voicemail feature helps clean up the clutter, too. But at the end of the day you still need to take time to listen to those voicemails, and that usually comes after other equally urgent but less disruptive tasks.

The services that really make voicemail more usable are those that convert voicemail into text and then send it to you via email or SMS (Spinvox, PhoneTag Yap and Jott, for example).

More mobile carriers are offering text conversion for a monthly or per-message fee. It’s my guess this will become more and more common. Voice is here to stay as a data input method, but listening to messages will certainly become an increasing luxury, to be reserved for loved ones or those messages that aren’t transcribed properly (or you need to hear it for tone or emotion).

For now most people don’t have voicemail transcription services. So think before you voicemail, more and more people just find it annoying.

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That is what happened to SimulScribe, a handy voice-to-text service that turns voicemails into e-mail. When James Siminoff and Mark Dillon started SimulScribe in 2003, both had other full-time businesses. It was a side project that they codenamed “Simultaneous Voicemail Transcription,” which they shortened to SimulScribe. But now five years later, it is a full-time gig that’s growing but the name is holding back the startup. Siminoff admits:

The name SimulScribe totally sucks for our business. People have a real challenge remembering the name and they cannot spell it, which is a real problem considering that new customers need to type in our web address to sign up. When your company offers a consumer product that relies on viral marketing, a difficult name is a really bad thing. In fact, I’m constantly amazed at how well we have been able to do with such a shitty name.

Name recognition is especially important when you are up against better-funded competitors like SpinVox (which could also use a better name, but has raised $200 million to SimulScribe’s $5.7 million). Siminoff has been looking for a new name for two years, one with a domain that wouldn’t cost an arm and a leg. Finally, a few months ago after a red-eye flight from LA to New York, after not returning many phone calls for days, a friend left a message saying he was tired of playing phone tag. Siminoff immediately called his chief marketing officer (at 6:30 in the morning) and told him to buy the domain. But PhoneTag.com was taken.

Four months and $30,000 later, he bought the domain, and today SimulScribe is changing its name to PhoneTag. It is a much better name. SimulScribe was so off-putting somehow, but PhoneTag sounds fun. What do readers think, will it make any difference?

In celebration of its new name. PhoneTag is giving away a free 30-day trial plus a special “F*#@ Voicemail” T-shirt to the first 100 TechCrunch readers who sign up here. The service is also launching a new feature today. You upload your contacts from Outlook, Mac Address Book, Gmail, or Yahoo, and every time you get a voicemail from a contact, you can email them back. That’s the kind of phone tag I could play all day.

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