Top speech recognition vendors to merge

Speech technology company Lernout & Hauspie Speech Products Inc. has

agreed to acquire competitor Dragon Systems Inc. in a deal that will eventually

involve a consolidation of the two product lines into one.

L&H will

continue to produce and support products from both companies in the short

term, but "in the long term the goal is to ultimately have a single product,"

said Jo Lernout, LH's co-chairman.

The first step L&H

will take after the acquisition is to try to get more copies of both companies'

software on the desktop. "Today, only half of one percent or so of all

personal PCs are enabled with voice technologies," Lernout said. "That is

an enormous drought and there is demand."

The company also has designs on

the mobile Internet market. "It's very hard to surf the Net with a 1 and

one-half inch screen and no keyboard," Lernout said. "And when you are driving,

you need to keep both hands on the wheel and eyes on the road," he added,

referring to Internet-enabled automobiles.

The company will continue to expand its relationship with Microsoft

Corp., which, in addition to having a $60 million investment in the company,

offers LH's translation service on its Microsoft Office Web site.

— Gray is London-based correspondent for IDG News Service