I sat in on a good venture capital panel yesterday at Mobile Northwest 2009 in Seattle. No huge arguments or chair throwing to speak of (we’ll see what we can stir up at the next few Xconomy Forums). But some solid and useful observations from Geoff Entress of Voyager Capital, and also a prominent Seattle-based angel investor; Adrian Smith of Ignition Partners in Bellevue, WA, an expert in telecom and wireless; and Puneet Tandon of Bellevue-based T-Mobile USA, who is looking to sign partnerships with top entrepreneurs in digital media and social networking. (You can also see some comments from mobile VC Tom Huseby’s keynote here.)

The panel was moderated by Tricia Duryee, the Seattle-based correspondent for mocoNews, a website that covers wireless telecommunications. Here are my quick “top three” takeaways from the discussion of the local mobile industry:

1. The panic may be over, but caution rules. Entress says he’s added nine companies to his portfolio this year, out of a total of 32 he’s involved in (and six mobile firms, including TravellingWave, Swype, Dashwire, and Treemo). “We’re definitely not out of the woods yet,” he said. “But 2010 might be a good year for selling companies.”

2. It’s not all about the iPhone. Entress and Smith pointed out that Apple has only 17 percent of the smartphone market, so there’s plenty of opportunity on other platforms, like the BlackBerry and devices that use Windows Mobile. “Apple has a huge amount of mindshare,” Smith said, “but the critical thing is the development environment around [mobile applications].” Tandon agreed, saying, “Barriers to doing business with us [carriers] perhaps have been lowered.” Entress stressed the importance, especially for startups, of trying to avoid “getting locked into any one carrier, handset, or operating system.”

3. Watch advertising, input technologies, and connected devices. Tandon pointed out that by sometime next year, there are projected to be 3.3 billion Web-connected devices, and 70 percent of them will be connected via wireless operators. That means carriers will be willing to pay to know “who are the social influencers in your subscriber base,” he said. Smith and Entress said Google’s $750 million acquisition of AdMob signifies that mobile advertising is here to stay—but that the deal was the “first one out” (like YouTube for video), so don’t look for anything near that sort of valuation again. Entress added that he’s working with a number of startups selling new ways of inputting text on mobile devices (using speech recognition, touch-screen methods, and so forth). For all our fancy gadgets, it seems we still struggle to communicate.

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It’s been a very busy week for news in the mobile industry. First, Amazon (NASDAQ: AMZN) rolled out a one-click mobile payments service that promises to shake up the world of mobile-app developers and distributors. Then it seems like all hell broke loose, courtesy of the massive CTIA wireless expo going on in San Diego through this Friday.

Here’s a quick summary of what’s happening in mobile-device interfaces, iPhone apps, and other mobile news from the Northwest:

—In the area of speech interfaces, Seattle-based TravellingWave announced today at CTIA its “voice-powered text prediction” application for mobile phones. The idea is to combine keyboard-based text input prediction with speech recognition so you don’t need to press as many buttons, while keeping the text-entry process accurate and simple to use. TravellingWave was founded in 2004 and is backed by its founder, angel investors, and grants from the National Science Foundation.

—Not to be outdone, Microsoft’s Bing and Sprint said today that the upcoming Samsung Intrepid smartphone (available Oct. 11), which runs on Windows Mobile, will incorporate Microsoft’s Tellme software to enable consumers to use their voice to dial contacts, compose text messages, and search the Web for business listings, cafes, weather and traffic reports, maps, and directions. It’s the first mobile device to use Tellme, as far as I can tell.

—Seattle-area startup Glympse, which focuses on mobile location sharing, announced yesterday it has been selected as a “showcase” application within Windows Marketplace for Mobile, Microsoft’s recently announced mobile app store. So Glympse is now available on Windows phones with GPS, and is in private beta trials on the iPhone. Back in May, Glympse first launched its service on T-Mobile phones with Google’s Android operating system, and CEO Bryan Trussel talked with me about the company’s strategy.

—Who knew that developers in Portland, OR, had put out so many iPhone apps? Silicon Florist reported yesterday that the region is responsible for making more than 40 apps in the iTunes store, including prominent ones from Starbucks, Barnes & Noble, Whole Foods, and Zipcar. The list also includes Stanza, the hit e-book app developed by Lexcycle, which was co-founded by Portland resident Marc Prud’hommeaux. Lexcycle has since been absorbed into Amazon. (Don’t mess with Seattle.)

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Vlingo, the Cambridge, MA-based startup that makes a suite of speech-to-text applications used by millions of iPhone, BlackBerry, and Nokia mobile device owners, is about to get a brain transplant of sorts. It said today that it will largely abandon a core speech-recognition engine developed by IBM and maintained by Nuance Communications in favor of a system from AT&T Labs in New Jersey.

As part of the shift, says Vlingo CEO Dave Grannan, Vlingo and AT&T have agreed to a long-term strategic alliance. Vlingo’s speech scientists will be able to modify and improve the source code for the AT&T technology, called Watson, while AT&T will take a minority ownership stake in Vlingo. All of Vlingo’s applications will be running on top of the AT&T speech-recognition system by the first quarter of 2010, Grannan says.

Vlingo’s own speech scientists have developed software that exploits information collected from users—the way a Bostonian’s pronunciation of a dictated phrase like “I parked my car” might differ from a New Yorker’s, for example—to build statistical models that help improve speech-recogition accuracy over time. These models provide supplemental input that helps to guide a core speech-recognition engine as it transforms speech sounds into text. Vlingo didn’t build its own core engine—it has long licensed that part of its system from IBM.

The switch from IBM’s engine to AT&T’s is a “best of all worlds” situation for Vlingo, in Grannan’s words. For one thing, he says, the Watson technology simply works better than the IBM recognizer. “Watson is superior on speed and base-level accuracy,” he says. Once the transition is complete, users of Vlingo’s iPhone, BlackBerry, and Nokia apps should notice fewer wrong guesses in the transcriptions of their utterances. Grannan says they’ll also see a few new features, such as automatic punctuation, that Vlingo can now add because it will be able to tinker with Watson’s innards.

But just as important, the switch will help Vlingo disentangle itself from its strained relationship with Nuance.

Burlington, MA-based Nuance (NASDAQ: NUAN) is one of the Boston area’s biggest high-tech firms, and it is the world’s largest specialized provider of speech-related technologies. It offers software for mobile speech recognition that competes directly with Vlingo’s. In June 2008, after losing out to Vlingo on a contract to supply Yahoo with speech-recognition technology for its oneSearch service, Nuance hit Vlingo with a lawsuit alleging that …Next Page »

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It was another quiet week for deals in the Northwest, as the holiday weekend brought summer to its unofficial close. We saw a little activity in software, mobile, and semiconductors, and heard from an old Seattle-area dealmaker (see below).

—Kai-Fu Lee, the former Microsoft vice president and founding director of Microsoft Research Asia, has quit as head of Google China and has raised $115 million to create an incubator for high-tech startups in China, as Bob reported. The new organization, Innovation Works, is based in Beijing and is backed by investors including WI Harper Group, Foxconn Technology Group, the Legend Group, the New Oriental Education & Technology Group, and YouTube co-founder Steve Chen. Lee’s incubator will focus on building startups in the Internet, mobile, e-commerce, and cloud computing spaces.

—Bellevue, WA-based VoiceBox Technologies said it has raised $13 million from corporate investors in Asia, including AutoNavi, Inventec, MiTAC, and the Morningside investment fund, since 2008, bringing the company’s total funding to about $21 million. VoiceBox, which makes speech recognition technologies for voice-based search in automotive and mobile applications, is looking to raise an additional $15 million from institutional investors.

—Hillsboro, OR-based TriQuint Semiconductor has acquired TriAccess Technologies, a maker of integrated-circuit amplifiers for multimedia applications, based in Santa Rosa, CA. Terms of the deal were not announced. TriQuint (NASDAQ: TQNT) develops wireless communication technologies for mobile, cellular, aerospace, and defense projects.

—Seattle-based Dashwire, a maker of synchronization software for Web and mobile devices, raised about $1.1 million in new equity financing. Bellevue, WA-based Trilogy Equity Partners is a new investor in the startup, which previously raised $1.6 million from Best Buy Capital and Seattle-area investor Geoff Entress in May.

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[Updated 9/3/09, 3:00 pm. See below.] Bellevue, WA-based VoiceBox Technologies, a developer of speech recognition systems for use in cars and mobile applications, has raised about $13 million from corporate investors in Asia over the past year. The investors include AutoNavi, Inventec, MiTAC, and the Morningside investment fund.

[An earlier version of this story cited a regulatory filing stating that VoiceBox had raised $7.4 million in equity and options out of an $18.6 million offering, and said the investors were not disclosed---Eds.]

Chief strategy officer Victor Melfi of VoiceBox says the company has raised a total of about $21 million to date, including investments from friends and family, and InfoSpace. He adds that VoiceBox is now looking to raise an additional $15 million from institutional investors, for which it has signed on Seattle investment bank Cascadia Capital. Melfi says VoiceBox is sensitive to customers in Europe and Asia—particularly China—and that it is developing technology for nine different languages. [This paragraph was added at 3:00 pm after speaking with Melfi---Eds.]

VoiceBox is developing what it calls “conversational voice search” software that lets you search, navigate, and discover content and services using natural spoken language. An example would be telling your car to give you directions to a particular location, pick a song to play, and adjust the temperature—all while you’re driving. Or telling your smartphone to search for a stock quote or other information online while you’re on the go.

Technologically, it’s a very hard problem. That’s because of ambient noise, differences between people’s accents and the way they make requests, and, fundamentally, the challenge of correctly understanding the meaning of what they’re asking for. Voicebox has partnerships with a number of companies including IBM, Toyota, and XM Satellite Radio to refine its software. The company also has an iPhone app for voice dialing.

VoiceBox was incorporated in 2001, and is led by its co-founder, chairman, and CEO Mike Kennewick, a former manager at Digital Equipment Corporation and then Microsoft. Kennewick previously founded Saros, a document management software company that was bought by FileNet in 1996. As of January 2008, VoiceBox had not taken any venture funding, but was considering taking a round, according to VentureBeat.

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If you had to pick a birthday for the Internet, September 2, 1969—40 years ago today—would be a good candidate. That’s the day a team of researchers at UCLA sent the first computer-to-computer transmissions using the Interface Message Processor (IMP), the grand-daddy of all packet-switching routers and the foundation of the military-university Arpanet, which paved the way, in later decades, for the Internet. The IMP was built at Cambridge, MA-based Bolt, Beranek and Newman, now BBN Technologies. So the timing of yesterday’s announcement that BBN will become part of Massachusetts-based defense giant Raytheon (NYSE: RTN) seems auspicious, since it seems to guarantee that the firm’s long tradition of innovation will continue under local management.

Originally founded by a pair of MIT professors as an acoustic consulting firm, BBN has had a hand in the development of an eclectic range of important digital technologies, including parallel processing, speech recognition, the Logo educational software language, genetic algorithms, satellite communications, and the @ sign in e-mail addresses. But the firm has traveled a twisty path over the last decade and a half.

GTE bought the company in 1997 and, as a condition of its 2000 merger with Bell Atlantic to create Verizon, spun off BBN’s Internet-related assets under the name Genuity. (Genuity’s 2000 IPO produced disappointing returns; the company went bankrupt and was acquired by Colorado-based Level 3 Communications in 2002.) The remaining parts of BBN were pried away from Verizon in a 2004 deal led by two venture firms, Cambridge, MA-based General Catalyst and Palo Alto, CA-based Accel Partners. Partners from the firms took four of BBN’s five board seats.

Since then, the 700-employee company has focused on bringing more products to market, with at least two notable successes: its Boomerang “shooter detection” system, used by U.S. forces in Iraq and Afghanistan to pinpoint the origin of small-arms fire, and EveryZing, a 2005 spinoff (originally known as Podzinger) that uses speech recognition technology developed at BBN to help media companies monetize their audio and video content by creating machine-readable transcripts that can be found by search engines and ad-placement algorithms.

But venture partners aren’t, as a rule, interested in being long-term corporate overseers, so it isn’t a huge surprise to see General Catalyst and Accel handing over their stake in BBN to Raytheon, a $23 billion defense contractor and electronics manufacturer whose history in Massachusetts goes back even farther than BBN’s. The terms of the acquisition, which is expected to close by the end of this year, haven’t been disclosed. But David Fialkow, managing director at General Catalyst, said in a statement that the sale was an “excellent result” for BBN’s investors and employees. BBN president and CEO Robert “Tad” Elmer said being part of Raytheon would act as “a multiplier on our proven ability to deliver advances to the market rapidly and profitably,” and Raytheon executives said the acquisition would strengthen the company’s capabilities in networking, video surveillance, and advanced sensing applications.

MIT physicist Richard Bolt and acoustics expert Leo Beranek founded the company in 1948, and brought in a former student of Bolt’s, an MIT architecture graduate student named Robert Newman, early enough to include him in the corporate moniker. The company’s first contract was for the acoustic design of the General Assembly Hall at the United Nations headquarters in New York. On the strength of that work, the firm went on to …Next Page »

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In a convergence of two legendary Boston-area technology concerns, Waltham, MA-based defense contracting giant Raytheon (NYSE: RTN) said today it will acquire Cambridge, MA-based BBN Technologies in a deal expected to close by the end of this year. Financial terms weren’t disclosed. BBN pioneered the development of the Arpanet, the predecessor to today’s Internet, and continues to have strengths in networking, speech recognition and translation technologies, quantum cryptography and communications, and related fields. The privately held firm was acquired by Cambridge, MA-based venture firm General Catalyst and Palo Alto, CA-based Accel Partners from Verizon Communications in 2004. Raytheon said BBN will become part of its Network Centric Systems division. We’ll have more details on the acquisition in a follow-up story.

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Nuance Communications (NASDAQ: NUAN), the Burlington, MA-based voice technology juggernaut that has already absorbed most of its East Coast competitors, reached west today, announcing that it has acquired Seattle-based Jott.

Jott, founded in 2006 by ex-Microsoft employees, started out as a free voice-to-text service that allowed users to record messages via telephone that were then transcribed into e-mails. Over time, the company transitioned to a paid business model, and expanded the capabilities of its service to let users create text messages, blog posts, appointments, reminders, and notes. The service has proved popular among mobile professionals, gaining hundreds of thousands of users, according to the company.

Nuance’s acquisition of Jott gives it a credible product in the area of phone-based voice-to-text services, where other companies such as Google, with its Google Voice service, and UK-based Spinvox have begun to encroach.

“Jott’s voice-to-text offerings have experienced a groundswell of adoption and positive industry recognition since the company’s inception, and we’re thrilled about the opportunity to expand our market reach and our voice services portfolio,” Nuance senior vice president Michael Thompson said in an announcement. “Together we will deliver a range of new services to our mobile operator and enterprise customers.”

Nuance isn’t saying how much it shelled out for Jott. The startup was funded by Bain Capital Ventures, Draper Richards, Ackerley Partners, and UK-based Atomico Investments; its last publicly divulged funding round, in 2007, amounted to $5.4 million. Jott may have needed a larger partner like Nuance in order to compete in its sector, given that competitor Spinvox, with some $200 million in venture cash, had far outpaced it in fundraising efforts.

Nuance and Jott said that Jott’s services, including Jott Assistant, Jott Voicemail, and Jott for Salesforce, will keep working as usual, with no interruptions in service. But as a result of the acquisition, Jott-like capabilities may come to many more consumers—Nuance says it plans to package Jott Assistant as part of the voice services it provides to wireless operators.

“Our combined expertise will bring innovative and differentiated voice services to a variety of markets with tremendous scale,” Jott co-founder John Pollard said in a statement.

One area where Nuance’s technology may help Jott is in automated speech-to-text software. While the basic user interface that Jott users encounter when they call the service is driven by speech recognition software, users’ recordings are actually transcribed by humans working in large processing centers. Replacing those humans with advanced speech-to-text software, similar to Nuance’s Dragon Naturally Speaking line of dictation software, would be an obvious way to make Jott’s service more efficient and scalable.

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Ask Dan Rosen to define innovation, and he’ll say it’s “a breakthrough in technology that leads to a business breakthrough.” It’s a concept that Rosen is well acquainted with, having been a founding partner of Seattle-based Frazier Technology Ventures, a prominent venture capital firm, and the CEO and president of his own investment and advisory firm, Dan Rosen & Associates, as well as the chair of Seattle-based Alliance of Angels. He has recently backed local companies like Geospiza, Modumetal, and Ontela.

Rosen also has the distinction of having spent a significant amount of time in all three of Xconomy’s network cities. He did his undergraduate studies in biology at Brandeis University in the Boston area, and his Ph.D. in biophysics at the University of California, San Diego, before embarking on a distinguished career at AT&T and then Microsoft. At the latter, his work spanned technical areas from speech recognition to search; he was general manager of new technology, general manager for MSN, and also worked with Microsoft Research.

I recently had a chance to speak with Rosen about the process of innovation and the role of big companies and startups. There’s a lot more where this came from, but here are a few highlights:

—On the West Coast rivalry between Seattle and San Diego: “We [Seattle] were so far ahead 10 years ago, being home to companies like Microsoft, Amazon, Boeing. They’ve surpassed us now in biotech. In software, they were nowhere 10 years ago, and now they have SAIC, Qualcomm. They compare to us in a lot of ways, in biotech, wireless, and software. They’ve gone from having little investment to quite a bit. I’m very impressed with the vibrancy, though the cost of living is so high in San Diego.”

—On a venture capitalist’s view of the innovation process: “You have ‘innovation factories’ like universities. Without them, nothing happens. But when you’re an investor looking for companies in a university, you don’t find them…That’s the crux. You have to understand the technology, but also understand the industry in the creation of a company.”

—On whether big companies innovate: “People always say Microsoft doesn’t innovate. I disagree. Microsoft understands what ‘just good enough’ for customers is…They’re brave enough to cannibalize their products for the benefit of customers.” A classic example would be the transition from DOS to the Windows operating system in the 1980s. Rosen added, “What really enabled the Internet was Windows 95. Microsoft standardized the TCP/IP stack.” (That’s the Internet’s communications and networking protocol.)

—On the future of Web search: “Google essentially won by default. The early search leaders like Yahoo and Excite became media portals. MSN went to their shows and content. Google did the simple thing. They did search, and they did it really well. It was not about keywords, but about finding what you want on the Internet.”

Asked about Bing, Microsoft’s new search engine, Rosen added, “Some of the Bing features look like they take advantage of patents we filed in the first six months we were working on it.” (This was at MSN, and the patents were on semantic understanding of text.) One thing is clear: it’s still early days for search, and all the applications around it.

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If you want to dictate notes into your computer without typing, speech recognition software like Dragon Naturally Speaking, from Burlington, MA-based Nuance Communications (NASDAQ: NUAN), works surprisingly well these days. Even without training, dictation software can hit accuracy rates of 99 percent; once it learns your personal speech patterns, it’s nearly flawless.

But using speech commands to do almost anything else on your computer is far more difficult. Nuance says the latest version of Dragon Naturally Speaking can be used to control applications such as Microsoft Word, Outlook Express, and Internet Explorer, and the software even includes “voice shortcuts” that let users interact with search engines using natural-language utterances like “Search the Web for global warming articles.” But for complex, oft-repeated command-and-control operations, like opening or closing windows or moving blocks of text in a document, using natural language commands can be tedious. It also tends to be slower than using mouse and keyboard commands, since the software has to spend a good deal of time figuring out what you meant before it acts. For the large group of computer users who turn to speech recognition software because of repetitive strain injuries (RSI)—and who aren’t supposed to touch their computers at all, lest they aggravate their condition—that’s a dangerous situation.

That’s the problem—and the opportunity—that Boston-based Redstart Systems has set out to address. After nearly 15 years of behind-the-scenes software development, the tiny, self-funded startup today launched a program called Utter Command that vastly speeds up command-and-control operations for Windows computer users who already have Dragon Naturally Speaking Professional.

The secret to Utter Command isn’t speech recognition—it depends on Naturally Speaking as its speech engine—but rather its ability to parse “stacked,” shorthand commands. For example, instead of laboriously saying, “Move the cursor to the end of the sentence, select the last three words of the sentence, and delete them,” an Utter Command user would simply say “End 3 befores delete.” (In this example, “befores” is shorthand for “words before”—and is a good example of the way Utter Command clips things down.)

At $395, the new program isn’t cheap. But it may be a worthwhile investment for people who really can’t touch their computers. And if you view it as a powerful add-on that makes up for features missing in Naturally Speaking Pro, which retails for $899, the price tag seems even more reasonable.

Redstart president and founder Kimberly Patch, a science writer who has worked at PC Week and Technology Research News, says she first conceived the software in the mid-1990s when she developed a repetitive strain injury from typing on her computer. “I started out using Dragon Dictate 1.0, but I got frustrated with it and starting writing macros to speed things up,” Patch says. “But I’d forget half the macros I wrote, and then I’d have to rewrite them. I realized it was easier to remember standardized commands. I was writing about things like cognition and linguistics, and it turned out that this made sense according to the cognitive studies; there are MRI studies that show that certain things are easier to say than others.”

What Patch was discovering (as she explains in a series of papers on the Redstart website) was that sticking to a small set of commands, and arranging them according to a precise grammar, might actually create a lower cognitive load on a user than trying to speak to a computer as if it were a person. It would probably ease the load on the computer, too, since the software wouldn’t have to anticipate all the different ways a person might phrase a command in natural language.

Patch started writing down the commands in her grammar to make sure she was using them consistently. A bit later on, she found a programmer to help her incorporate the commands and the grammar into an application. And about five years ago, she decided to turn the application into a product.

But getting it working the way she wanted and writing up the documentation “took a lot longer than I thought it would,” she says. On top of that, there was an ethical concern. “With RSI, you can type, but you don’t want to, and if you get frustrated with something, you will hurt yourself,” she says. “We wanted to make sure our system was not going to …Next Page »

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Burlington, MA-based Nuance Communications is wrapping up its long and sometimes contentious crusade to acquire Zi, a Canadian competitor in the market for text messaging software, which has agreed to Nuance’s $35 million buyout offer.

The deal, announced today, provides shareholders of Calgary-based Zi (NASDAQ:ZICA) with 34 cents in cash and 0.4 shares of Nuance (NASDAQ:NUAN) stock for every share of Zi stock. That values the company at 69 cents per share—or a 73-percent premium over the closing price of the stock on its last day of trading before Nuance began its tender offer to acquire Zi shares on November 25. (Hindsight is 20-20, but the Nuance offer that Zi rejected back in August was worth $40 million, or 80 cents per share.)

Zi’s board has unanimously accepted the offer; now it needs to be approved by Zi’s shareholders, at a meeting scheduled for April. Zi offers Nuance its line of products that speed entry of text messages, correct typos, among other features. The acquisition would also eliminate a competitor to Nuance’s speech-to-text technology.

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After its last bid to acquire Calgary, Alberta-based Zi Corporation (NASDAQ: ZICA) for $0.40 per share expired on Friday, Burlington, MA-based speech technology giant Nuance Communications (NASDAQ: NUAN) now says Zi has until February 13 to respond to its offer. The board at Zi, which makes software for quickly typing text into mobile devices that competes with Nuance’s speech-to-text systems, has repeatedly rejected Nuance’s takeover offers, as we reported in August and November. In its Friday announcement, Nuance emphasized that its current offer represented a 25 percent premium over Zi’s closing price on August 13, prior to Nuance’s first acquisition bid—but the offer is actually below Zi’s current market price (the company was trading at around $0.41 per share this morning). After Zi rejected Nuance’s August bid, Nuance filed a patent infringement lawsuit against the Canadian firm.

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Burlington, MA-based Nuance Communications, shortly after announcing yesterday that it will raise $175 million in a stock sale to private equity firm Warburg Pincus, revealed that it has reached a deal with IBM to incorporate the computing giant’s speech technology into Nuance products. Nuance said it “expects the first integrated speech innovations combining Nuance and IBM technologies to be available within two years.” Nuance also bought the rights to several speech-related IBM patents; the companies aren’t saying how much money changed hands.

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Seattle-based Jott, which provides free voice-to-text services for e-mail and text messaging, announced today it is moving to a paid model effective February 2. Jott Founder and CEO John Pollard cited the economy and ad market as reasons for the move. The startup, which was founded in 2006, is also rolling out a voicemail-to-text tool today.

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Many Massachusetts companies require new employees to sign agreements saying that if they leave, they won’t go to work for a competitor for at least a year. The idea behind these non-compete agreements is to prevent a company’s competitors from gaining access to trade secrets and key personnel. But there’s a growing chorus of entrepreneurs, venture investors, labor-rights activists, and others saying that the agreements are unfair to employees. They not only make it harder for workers to switch jobs, the argument goes, but they retard innovation, and make Massachusetts a less attractive place to work than California, where a statute makes non-competes illegal and employees can switch employers and start new companies at will, as long as they respect traditional confidentiality agreements.

Now the debate is about to make its way anew to Beacon Hill. State Representative Will Brownsberger of Massachusetts’ 24th Middlesex district, which includes Belmont, north Cambridge, and east Arlington, says he plans to introduce a bill in the upcoming legislative session that would abolish non-compete agreements in the Bay State.

Brownsberger says he’s primarily interested in shielding average laborers from the effects of the agreements. Often, he says, these are low-level service workers such as telephone representatives who probably don’t have any valuable trade secrets, but are nonetheless prevented by the agreements from seeking other positions inside their industries. “I’m concerned that these agreements are often entered into by employees who are at a substantial bargaining disadvantage, and that they end up inhibiting those employees from making appropriate job changes,” Brownsberger told me yesterday.

But he says he also worries that non-compete agreements in Massachusetts may steer talented engineers and other innovators toward other states where they feel they will have more freedom to pursue their work. “I am concerned that these agreements in Massachusetts may be a barrier to recruitment of the best technology talent,” he says.

Brownsberger is drafting the bill—which he plans to file in the Massachusetts House of Representatives in mid-January—with help from employment lawyers and from Caroline Huang, a Belmont resident and speech scientist who has become active on the issue recently. “I’ve always felt it was unfair,” Huang says. “I approach this as a labor rights issue.” (Caroline Huang is the sister of Greg Huang, who is Xconomy’s Seattle editor.)

Huang says she first encountered a non-compete agreement back in 1990, when joining her first employer, Dragon Systems. (The maker of a well-known speech recognition system called NaturallySpeaking, Dragon was later acquired by Lernout & Hauspie, whose assets were eventually acquired by ScanSoft, which later changed its name to Nuance.) “It bothered me, because I was worried about getting my next job,” says Huang. “We are very specialized in my field, being speech scientists, and we need to work in speech. I signed it, but my recollection is that I felt very boxed in.”

And, in fact, the non-compete agreement came back to haunt her. After leaving her position at Dragon, Huang went without work for several months, then took a job at a text processing company rather than risk violating the agreement by looking for work with other speech companies. “The agreement seemed very broad, and I was in no mood to see where the limits were,” she says. “They were telling me that I could not work for a direct or indirect competitor, whether it was for compensation or not, in any business that competed with their current business, even with a business being planned. It was very hard to tell what was still in speech that would not have fallen under this.”

Much later—last fall, in fact—Huang says she began to notice that other people were talking and writing about the effects of non-compete agreements. One of these was Bijan Sabet, a general partner at Boston’s Spark Capital who believes the agreements hurt business in Massachusetts; a year ago, Sabet announced that Spark was dropping …Next Page »

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Back in June, Cambridge, MA speech-recognition startup Vlingo rolled out software that lets Blackberry owners run their devices using voice commands instead of their thumbs—opening applications, dictating e-mails, entering terms into Web search engines, and the like. CEO Dave Grannan said at the time that Vlingo engineers were working on similar software for other devices, including the Apple iPhone. And now they’ve followed through on that promise.

Starting this morning, iPhone owners can download a free Vlingo app through the iTunes App Store. Much like the Blackberry software, the application lets users place phone calls to people in their contact lists by speaking their names, and initiate Web searches by speaking their search terms. (There’ a nice video here explaining all of the application’s features.) But unlike the Blackberry app, Vlingo’s iPhone app can also be used to search local business listings and see the results on a map—for example, by speaking an inquiry such as “movie theaters in Boston.” And it lets users dictate status-update messages that are posted instantly to their Facebook or Twitter accounts.

Vlingo’s iPhone app does, however, lack a few of the most useful features of its Blackberry cousin, notably the ability to dictate text messages and e-mails. Presumably, this is due to Apple’s decision to limit outside developers’ access to certain built-in iPhone programs like mail and SMS text-messaging, while providing extensive application programming interfaces for others, such as the Google Maps application.

Vlingo is a relative latecomer to speech-to-text game on the iPhone—Google, for example, added extensive speech recognition features in a recent update to its own Google Moblie App. But Vlingo claims that its mobile speech-recognition algorithms, which get better over time by incorporating user feedback, are the most accurate on the market. “We’re proud to debut our breakthrough voice recognition technology on iPhone, taking simplicity one step further by reducing much of the reliance on typing,” Grannan said in a Vlingo announcement released today.

I’ve been testing the Vlingo iPhone app for a couple of weeks, and will be writing up my review, along with a look at several other new mobile search applications, in my Friday “World Wide Wade” column.

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Cambridge, MA, startup Vlingo today launched a drastically improved version of its voice command and speech-to-text interface for RIM Blackberry smartphones, first released in June. The free vlingo 2.0 software, which works on Blackberry Pearl, Curve, and 8800 series phones, not only allows users to compose text messages and e-mails by speaking into their phones, but also lets them create status updates for Facebook and Twitter and launch built-in Blackberry applications such as the address book, the camera, the memo pad, or the calendar and third-party applications such as Google Maps, the Opera browser, or Viigo.

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Google’s YouTube makes it incredibly easy to share cool videos with your friends or embed them in your blog or website. The site’s friendliness toward viral distribution is probably why almost every video on the Internet ends up on YouTube sooner or later. But if big companies that publish a lot of Web video leave it to YouTube users to spread their media, they’re leaving advertising dollars on the table, argues Tom Wilde, CEO of Cambridge, MA-based video search startup EveryZing.

That’s why EveryZing is rolling out a new product today—a customized video player called MetaPlayer that helps video publishers give website visitors YouTube-style control over videos without sacrificing ad impressions.

“People want to clip, share, and read video content the same way they do with all other Web content,” Wilde told me last week. “YouTube makes it easy, so that’s where you see it happening most. The trick is balancing the need to respond to consumer requirements while still staying in business.”

EveryZing has focused to date on using speech-to-text technology developed at Cambridge’s BBN Technologies, which spun off the company in 2006, to create written transcripts of podcasts and video files. By publishing these transcripts on the Web as part of a file’s “metadata,” EveryZing makes it much easier for search engines to find the files, for advertising networks to attach relevant ads, and for viewers to jump straight to the segments within a video that interest them.

But up to now, most EveryZing customers had to go to third-party video hosting providers for the actual video player software that Web visitors use to watch videos. EveryZing client Boston.com, for example, turns to Cambridge-based Brightcove for its video services.

MetaPlayer, however, gives EveryZing customers an in-house option. The software offers several advanced functions, including thumbnail images that direct viewers to automatically identified “scenes” within a video, and time-stamped tags that make it easy to jump to the exact moment when a topic of interest is mentioned.

MetaPlayer also includes a clip-making tool that lets users pare down a video to their favorite section, then e-mail that custom clip to friends or embed it in their blog or social-networking profile. The key selling point for publishers: any “pre-roll” or “post-roll” advertising that came with the original video gets attached to the beginning or end of the customized clip.

“We’ve found that there are maybe three types of video users today on the Web,” says Wilde. “There’s the casual user who will just watch the video. Then there are the folks who want to get into it and navigate the video. Then there are the prosumers who want to use that video as part of their own publishing activities. Those folks end up being, in some ways, an extension of your own publishing capability, because they are taking videos and republishing them and getting you more consumption—and the key thing about MetaPlayer is that your pre-roll and post-roll and in-stream ads go with them,” bringing publishers more ad impressions and click-through opportunities.

EveryZing customers can also customize MetaPlayer’s look and feel (its “skin” or “chrome,” to use the industry terms). The Dallas Cowboys, for example, have created a blue, gray, and silver version that fits with the team’s extensive multimedia website (see image above).

MetaPlayer also plays well with video players from other Web video destinations, including YouTube. That means EveryZing customers can show material from YouTube inside their own branded players—tapping into YouTube’s deep pool of videos while avoiding the “lumpy” look, to use Wilde’s word, that comes from using multiple players from different companies.

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Nuance Communications, the Burlington, MA-based maker of speech recognition software, said today it has struck a multi-year agreement with Finnish mobile giant Nokia to provide speech and predictive-text technologies for Nokia mobile devices. The two companies also agreed to work together on advanced input technologies, including open programming interfaces that outside developers could use to create new features for Nokia devices. The exact terms of the agreement were not disclosed.

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The big-time acquisition train keeps on rolling through town. The latest Seattle-area company to get bought for big bucks is SnapIn Software, based in Bellevue, WA, which announced earlier this week that it is closing a deal with Burlington, MA-based Nuance Communications worth an estimated $180 million in Nuance stock.

On the surface, it’s not the most obvious pairing. Nuance is a speech-recognition giant. SnapIn makes mobile software for, among other things, automating customer support by providing a menu on the screen of your cell phone. But where they connect is in the market potential for providing customer service without a real live person on the other end of the phone—and in their combined access to the big wireless carriers, provided the two companies’ technologies can be integrated successfully. (I hate automated phone trees as much as the next guy, but if they can solve my T-Mobile problems faster than waiting 15 minutes for a representative, I’m all for it.)

To get some perspective on the deal, I caught up with Tom Huseby, who is chairman of SnapIn’s board— as well as the founder of SeaPoint Ventures and a venture/strategic partner at Oak Investment Partners, Hunt Ventures, and Voyager Capital. Huseby’s expertise is in the wireless sector. He couldn’t give too many specifics yet, because Nuance is driving the deal and it won’t close until October. But he seemed pretty impressed with how things were done. “Nuance was pretty damn smart to find us when they did. They looked at this market very early on and identified SnapIn as having a key position,” says Huseby. “They had a single-minded focus on what this means to them… and how to integrate [SnapIn] with their technology.”

Over the past few years, SnapIn has secured more than $30 million in capital from area firms Frazier Technology Ventures and Trilogy Equity Partners, as well as Hunt Ventures and Oak Investment Partners. Given the size of the Nuance deal, it seems like a solid exit for the startup and its investors. “I think SnapIn was worth more to a big company than it could grow to be on its own,” says Huseby. “As we checked out the deal, the price was something we found acceptable.”

Huseby says he will stay involved with SnapIn for the next year and a half, and the management team has agreed to sign on as well. Looking ahead, he says, “It’s a natural extension of the mobile market—1.2 billion phones are sold each year, and they’re all getting smarter and smarter. I’m just glad we started working on this when we did, five or six years ago…Nuance said, why not take advantage of this huge capability to solve a lot of problems?” Huseby mentions a lot of positive feedback from customers and end users in field tests of SnapIn’s software. “It’s a very positive product to have if you’re a carrier,” he says.

Which only reinforces the sentiment from SnapIn CEO Robert Lewis, who earlier this week pointed to “deeper relationships with carriers and every major handset vendor” as a key selling point of the Nuance deal—and a crucial step towards the widespread adoption of his company’s mobile software.

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