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Nuance Completes Zi Acquisition

Nuance Communications this week completed its $35 million acquisition of Zi Corp. and will incorporate Zi's mobile search technology into its suite of services.

This ends a sometimes-bitter acquisition process that began last August when Nuance offered twice the trading value of Zi's stock price. Zi resisted the offer, which led to a hostile takeover bid, as well as a patent lawsuit. The deal was eventually consummated for about $17 million in cash and $18 million in stock, and Zi's management encouraged stockholders to approve the deal.

"By incorporating Zi's text input technology into our mobile solutions portfolio, Nuance can better serve our global OEM and mobile operators that demand robust language support, particularly in Asia-Pacific market," said Steve Chambers, president of Nuance's consumer services, in a statement. "The Zi acquisition is also a key component of a broader Nuance strategy to give mobile device manufacturers and operators the ability to deliver breakthroughs in device accessibility via speech, predictive text and search, handwriting recognition, and powerful call-intercept capabilities."

For end users, the acquisition could eventually lead to new ways to interact with their cell phones and smartphones. For example, Nuance will integrate its speech-recognition software on Nokia handsets to control actions like sending text messages, and navigating. With Zi's mobile search and text-input technologies, this level of control can be taken to a higher level.

The move should also be a big boost for Nuance in the Asian markets, where consumers have a greater interest in speech and handwriting recognition because it can be difficult to fit their alphabets on a standard-size handset.

InformationWeek has published an in-depth report on the use of business software on smartphones. Download the report here (registration required).