SpinVox, a London-based technology startup that transcribes voicemails to text so that they can be more easily digitized, searched, and manipulated, has been acquired by speech recognition company Nuance for $102.5 million. We reported on the rumors of the acquisition a few weeks ago, when a $150 million price tag was floating around.

Nuance will integrate SpinVox’s services with its speech recognition platform. SpinVox, which has raised close to $200 million in funding, develops both web apps, including Spin-My-Blog and Facebook and Twitter integration, and mobile technologies. SpinVox has partnerships with a number of mobile carriers, mostly in Europe, including O2, Vodafone, Orange, T-Mobile, 3, and Virgin Mobile.

SpinVox’s investors ended up with $0.50 cents on the dollar; the company raised too much money and didn’t deliver. A competitor in the space SimulScibe, just struck a deal worth $17 million with Ditech, which seems to be more of a rational value for the transcription service. The last round of funding valued SpinVox at $500 million and there were rumors of the startup heading for an IPO. It turns out that was all spin.

Nuance, possibly the leader in speech-to-text processing, and with 40+ carrier relationship, is reportedly picking up Spinvox in a $150 million sale which might be completed before Christmas. But there was no source on the Sunday Times story and Spinvox tells us they aren’t commenting at all. The Sunday Times is often used as a vehicle to float ‘sale rumours’ which are actually designed to flush out more bidders.

This story could have been different, but the exit route to another likely suitor was cut off when SimulScribe, the ‘scrappy’ voicemail transcription company, effectively exited in an exclusive deal with Ditech Networksthat worth as much as $17 million back in September. It could be argued that SimulScribe played it right, setting expectations at a realisable level and executing on that promise.

The Sunday Times story did mention a deadline for the £30 million bridging loan which “has been rolled over to January to allow the takeover to be completed”. In other words, the Nuance deal smells genuine.

Spinvox raised between £120m and £150m in capital from GLG Partners, Goldman Sachs, Toscafund Asset Management and Blue Mountain Capital Management. The latest rounds came in the form not of new investment but of various tough-terms bridging loans totalling £73m.

With forecast revenues (not profit) next year of only £7m, Spinvox has had no collateral assets or cashflow to service these high interest loans. So equity holders have thus taken second place to those that had loaned the cash.

As others note, if this deal goes through Spinvox will have effectively turned £150m of investors capital into £92m. Now that’s one kind of translation service.

Executives and staff come last in this food chain, behind those that have put in the loans. Thus it seems unlikely that CEO Christina Domecq (pictured), who has presided over all this, will remain with the company if the sale goes through.

As usual, you can raise lots of capital with great powerpoint and PR, but it’s not the same as building, testing, iterating and improving. Spinvox was basically the exact opposite of a lean startup.

There were rumours of a sale in August.

And then in September a major investor wrote down its investment by 90% Invesco Perpetual said it has written down the value of its £759,000 investment to, er, £76,000.

What remains?

Plenty of egg on a few faces. First of all on us, as we gave them a Europas award (doh!), although to be fair we still think voice to text apps rock. But mainly on CEO Christina Domecq who paid staff in stock rather than cash over the summer. Although this didn’t work for all of them. Domecq told press in September that SpinVox would become cashflow and EBITDA-positive after their Latin America launch, within 90 days. We’re now well over that target.

Egg is also on the faces of shareholders, many of whom probably got a look at the anonymous dossier which went around various people and which detailed interesting spending of company funds.

Also, alas, on Dragon’s Den celeb, Ariadne Capital chief and Spinvox advisor Julie Meyer, who defended Spinvox and Domecq to the hilt, even saying Spinvox was “already profitable” and “conversion revenue is going through the roof” back in August.

On its CFO who only joined the other day, after the company went for 15 months without one (although one did join only to leave a week later).

On the technologists behind the actual service who couldn’t come up with an algorithm which could translate phrases beyond the most basic. In a quiet room.

But others may yet dodge the flying egg. It looks like co-founder Daniel Doulton will stay on if Nuance does indeed go through with the purchase.

However, as we’ve said in the past, Spinvox’s demise won’t matter to the real tech startup community.

Good luck then to tiny startup voxsciences perhaps.

The bill of particulars is damning. Unlike your e-mail inbox, voice mail is impossible to skim: If your phone tells you that you’ve got five new messages, you’ve got no choice but to listen to at least a bit of each one before you can decide what to do with it. In a user-interface decision that I suspect might violate some subclause of the Geneva Conventions, your voice-mail system insists on making you listen to the same instructional prompts between each message.

I haven’t listened to a voicemail in years now, instead using various third party systems for transcription. I’ve even disabled visual voicemail on the iPhone mostly because it still requires a few seconds of listening. I’d much rather get a poorly transcribed voicemail message (“hey john this is kevin ray from you start sorry to bug you again on the phone minutes away”) and get the gist of the conversation awaiting me than wait for a message from a warranty renewal service to pop up like a whack-a-mole. So goodbye, voicemail. Go. Go now.

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:

http://www.youtube-nocookie.com/v/s4B2SNev-8I&hl=en&fs=1&rel=0

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.

Today, mobile startup Skydeck is coming out of beta with a serious set of features that bridges cell phones and the Web, and a serious business model to boot. Up until now, Skydeck’s beta took data from your cell phone bill to show you what your real social network looks like based on who you call the most.

Now it is offering a service that syncs what happens on your phone to the Web, listing all of your contacts, received calls, missed calls, voicemails, and text messages. You can listen to your voicemails from your browser or, better yet, read a transcribed version of each voicemail (via SpinVox). Since it is online, you can also search all of your voicemails and text messages. And you can reply to messages from your browser, with all the calls appearing to come from your cell phone number. It works best on Blackberry and Android phones (although most of the features work on nearly any phone), and costs $9.95 a month.

In order to do the voicemail transcription, Skydeck actually takes over your voicemail (with your permission). Calls from your browser are free to other Skydeck members, or 3 cents a minute throughout the U.S. I want this service, but I’m not sure I want to pay $9.95 a month. Would you?

Skydeck raised $3 million last September, and CEO Jason Devitt previously founded Vindigo. Here is a video, in which he demos the new features.

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.

Things haven’t gotten a whole lot more complicated at Jott over the last two years. They haven’t raised much capital by recent standards – compare their $5.4 million in venture capital to competitor Spinvox’s $200 million. But the company has 420,000 (presumably) happy customers who primarily use it for one of three things: mobile productivity, hands-free communication and web services (voice I/O). People use it to send voice-to-text emails and sms messages, send Twitter messages, add calendar items, etc.

To date the company, led by ex-Microsofter John Pollard, has spent exactly nothing on marketing. Yesterday they left beta and released a free service called Jott Basic (beta users are now on that service, and the iPhone app remains free). Premium plans start at $4/month. Most people will be fine with the basic plan.

The company also released Jott For Outlook (this is really cool) and Jott Express, an Adobe AIR desktop application.

More details on the Jott blog.

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.

A number of services have launched to allow users to record messages and link to the recording from Twitter (see Twitsay, Twittergram). And services like Jott and Spinvox are providing tools that allow voice to text conversion for Twitter, Facebook, Pownce and other social networks. But nothing I’ve seen so far is as simple to use as TwitterFone, a new service by serial Irish entrepreneur Pat Phelan.

The service launched moments ago into private beta. To use it you need to verify your phone number and Twitter account, and TwitterFone will then give you a local phone number to call to leave messages (they support the U.S., UK and Ireland now, adding more). Then, any message you send will be transcribed, and posted to Twitter along with a link to the recording (here’s a test message I left). If the message is longer than 140 characters, just the first part is transcribed, but the entire recording is still available. There is a time limit of 15 seconds on the recording.

The service is partially automated via voice recognition software, and flagged words go to a human for translation. For now the service supports English only; Japanese support is promised in 8 weeks or so.

One problem/slightly humorous aspect of the service is that there is no going back once you start recording. In this test message I started coughing and just hung up. The coughing was dutifully transcribed and posted. A simple option at the end of a call to delete the message is needed.

The service is free for now, they may add premium features over time. We have a handful of beta accounts to give out now. Tell us why you think you need it in the comments below – the most compelling get an account.

SpinVox has some interesting Web apps, including Spin-My-Blog and Facebook and Twitter integration, but it is really a mobile play. People actually pay extra for this type of service on mobile phones. SpinVox has partnerships with twelve mobile carriers, mostly in Europe, including O2, Vodafone, Orange, T-Mobile, 3, and Virgin Mobile. They still have limited availability in the U.S. for any of their services. But if people like visual voicemail on the iPhone—which simply lists voicemails like e-mails but still makes you listen to them—imagine if they could translate all of those voicemails to e-mail and simply read them.

When it comes to mobile, voice is still the best way to input information but it is not the best way to extract it. SpinVox lets you have the best of both worlds. This voice thing is gonna be big.

Is making a phone call easier than thumbing an SMS? Depends what kind of phone you have and what kind of person you are. But the Dictaphone is now social. This will appeal at least to all those people who like to record their notes into a mini tape recorder. They can share those thoughts with the world, and computers will transcribe them.

As far as I can see from a quick perusal of SpinVox’s Website, its service is only available in Europe, and it is not free. But it is an obvious solution to the mobile user-interface problem. The best input technology for a mobile phone is speaking into it. Maybe competitors SimulScribe, Jott, or Yap will step up to the plate in the U.S.

Wait, there is already a way to turn a phone into a microphone for any Web application. It is called the MyVox API from VoodoVox. It is ad-supported so it is free. And the best app built on the API can win $25,000.

Hat tip to our man in Spain, Crunchgear’s John Biggs, who alerted me to the SpinVox announcement, and discovered these weird blockhead dolls at its booth at MWS:

Yesterday I asked you all to name this block guy. He’s still nameless but he got drunk last night and his head fell off.

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For some insane reason, SpinVox made hundreds of these little guys and you can go to the website and sent a message and some interns will change the position of the guys. I don’t know what they’re smoking, but I asked for some and they gave me a doll. Click to see them all.

Visual voicemail, visual shmoisemail. Alltell wireless just launched Voice2TXT using SpinVox to transcribe users’ voicemail messages to text, ensuring that a simple message (“Pick me up at the airport, mom, it’s snowing!”) will turn into “PUCK ME UP THE ASHPORT [UNINTELLIGABLE] I LIKE BLOW.” Ok, it won’t be that bad, but I’ll be trying the service this week to see how it stands up to mumbling, burps, and the occasional nose blowing that is part of my everyday parlay.

The service is available in a variety of pricing options: $4.99 per month for 20 voicemail conversions (each additional is 25 cents); $9.99 per month for 50 conversions (each additional is 20 cents); and $19.99 per month for 100 conversions (each additional is 10 cents). For more information on this innovative new feature, please visit www.alltel.com/voice2txt.

Product Page

Today they’re differentiating themselves from GrandCentral and closing the gap with their other competitors by adding speech-to-text transcription. And adding avatars to boot.

Their new avatar system will let you add some personality to your voicemail playback using SitePal’s avatars. It’s sure to come in handy if for some reason you enjoy getting your messages delivered by a bear.

Their speech-to-text offering allows you to transcribe voicemails to text for delivery via email or SMS. You can transcribe all your messages, or filter by contact. Transcription is available on their $9.99/month premium accounts including 40 messages a month with additional charges for each message thereafter, although they have a 14 free trial.

Spinvox and CallWave also offer call transcription. Spinvox is pricey in the U.S. if you take into account exchange rates, costing £9.99/month for 50 messages. CallWave is currently a good deal, transcribing calls for free during their open beta.

Previously GotVoice was a simple service that used your voicemail credentials and turned each voicemail into a MP3 file. Got Voice would then send out an email with a link to your GotVoice inbox. It basically allowed users to move voicemail administration from their phone to their computer.

The new features take that basic service several steps forward. First, two phones can now be associated with an account. Also, you can now compose voicemails via a flash recorder in the service (or via your phone), and deliver it to the voicemail of people in your contact list. This is great for responding to messages, or to broadcast a new message to one or more people.

Another useful feature of Gotvoice – since it has access to your phone admin via your credentials, you can also use it to change your voicemail greeting. They’ve created a tool that mixes your voice with any MP3 you care to upload. Once you’ve created the greeting, GotVoice will turn it into your voicemail greeting.

Finally, the coolest new feature. GotVoice will be launching a stripped down WAP version of the voicemail inbox page for access from a mobile browser. The result is a visual voicemail product that is sure to be the rage as soon as the iPhone launches with it’s own visual voicemail. This page can be accessed from the browser, and GotVoice is working to do deals with carriers in the U.S. to offer this directly as well.

What GotVoice isn’t doing yet is converting voicemails to text, something that they say they’re working on via a partnership. Jott and Spinvox do this now, and it is a bit of a hole in GotVoice’s offering. I look forward to the feature being added soon.

GotVoice has a free and premium ($9.95/month) version of the product. The company raised $3 million from Ignition Partners, Second Avenue Partners and Cedar Grove Investments in October 2005.

He’s been using the service since December and seems to be mighty pleased with it. Whenever you receive a voicemail, SpinVox converts the message to text and sends it to your phone via SMS. That way you can get the message in a timelly, but unobtrusive, fashion.

Although it is currently negotiating carriers, you can test the service out through the company’s blog.

SpinVox

Spinvox has mainly distributed their service through carriers, but will also set up customers directly. Pricing is to be determined by carriers. Their UK prices are here. If you would like to test the service, go to their test site, call the number on the screen, and in a few minutes your message should appear on their blog.

TechCrunch suggests looking at another voicemail conversion service from Jott, that retails at $10 per month for 40 conversions.

Spinvox mainly distributes their product through cell phone carriers, although they will set up customers directly as well. Pricing will be determined by carriers, but UK pricing is here, and it isn’t cheap.

I have been lucky enough to be using Spinvox to convert voicemails to SMS text messages since December, and it has been an incredible efficiency tool. If I miss a call while I’m in a meeting, I can see the SMS message a few seconds later and decide if I need to step out immediately and call the person back. In general, using Spinvox saves a ton of otherwise wasted time.

The company has set up a blog site to allow anyone to test the product – Go here, call the phone number on the site and leave a message. It will be converted to text and posted on the blog a few moments later.

Spinvox is currently negotiating carrier deals in the U.S., but has agreed to sign up 100 TechCrunch readers with free accounts, and there won’t be any charges for converted messages. If you live in the U.S. and would like to try Spinvox now, just leave a comment below and (this is important) leave your email address within the comment itself. Spinvox will contact you with the details.

See our coverage of Seattle based Jott, a company with similar technology but a slightly different product. SimulScribe is another company doing something similar to Spinvox, and charges $10/month for 40 voicemail conversions.

Spinvox has 150 employees and has raised a significant round of financing. The company says it should reach profitability by the end of 2007.