One day Tony Infantino might be able to say, “I told you so.”
Infantino is CTO and COO at Foodline.com, a two-year-old Boston company whose Web site offers addresses and reviews of 20,000 restaurants around the U.S. Under his supervision, Foodline.com last December started offering its New York customers a local phone number so they could listen to voice-activated restaurant reviews from his site.
The decision to voice-enable Foodline’s site was worth the expense, according to Infantino.
“There’s no doubt it’s easier to interact on the Web than by picking up a phone,” he says. “But people aren’t always sitting at their desks. They’re in the car, they’re walking. We want to provide them with the ultimate flexibility.”
By the end of the year, diners in New York and several other cities will be able to call a toll-free number and “talk” to the Web site to hear reviews and book reservations. The site is looking to recoup some costs by running ads on the telephone service, and eventually charging restaurants US$1 per reservation made through the Internet site or phone.
“Development costs aren’t that expensive if you can derive revenue from it, so get in now,” says Infantino. “You don’t want to wait three years, because by then everyone will be [there].”
THERE IS A VOICE
Foodline.com is at the vanguard of companies – including E-Trade, Flooz.com, Priceline, United Airlines and Zagat – adding voice access so their Web sites are seen and heard. They’re joined by a crop of startup “voice portals” such as Audiopoint, BeVocal and Tellme Networks. All offer telephone services built on speech-recognition technology that connects callers to Web-based news, stock quotes, travel services, e-mail, address books or other content from online sources.
An expanding pool of vendors of voice-enabling software, hosting and design services are providing the technology.
The cell-phone explosion, improvements in speech recognition and the desire for bigger returns on investments in content and back-end systems are driving Web sites to consider attracting eardrums in addition to eyeballs. Kelsey Group, a technology researcher, estimates advertising and transaction fees for voice-enabled Internet services will reach US$5.5 billion by 2005, and fees for voice-access hardware, software and related services will reach US$6 billion.
But some industry watchers are unconvinced that voice access – what some proponents call the “voice Web” – will amount to anything other than a sideshow. Analysts at Forrester Research were underwhelmed enough to title their May report on the sector “The Web’s Speech Impediment.” They conclude that “despite the hype, few firms need a short-term voice strategy.”
The bearish contentions haven’t doused the ardour of investors, who over the past 18 months have poured an estimated US$250 million into voice portals, application service providers and technology vendors. Two of the brightest IPOs since spring have been Nuance and SpeechWorks, top developers of speech-recognition technology used by voice portals and ASPs.
Skyrocketing mobile-phone use is fuelling these investments. Worldwide wireless subscribers are predicted to almost quintuple to 1 billion by 2004, according to the Yankee Group, a Boston researcher. For now, WAP phones are available to access Net data while on the go, but to use them people must arduously peck out commands on tiny cell-phone handsets.
Improvements in the technology, however, are beginning to bear fruit. Early speech recognition was marginal at best, and systems had to be trained by repeatedly recording words and phrases into a vocabulary database. But recent advances have brought accuracy rates to 90 per cent and higher, and voice training is no longer necessary.
In an effort to win more users and business customers, several startups, including BeVocal, HeyAnita and Tellme, are sharing source code with outside developers to bolster the number of applications written on their platforms.
“We have 80-year-old grandmothers who are totally addicted” to voice access, says Mike McCue, Tellme’s co-founder and chief executive. “Consumers have no idea it’s the Internet and we never tell them. It’s just a cool service.”
Still, dot-coms and other companies must decide whether to invest in voice access. Adding a phone interface to a Web site costs from tens of thousands of dollars for a low-end, outsourced system to millions of dollars for a large site or Web-based customer-service call center.
Foodline.com spent US$30,000 on three servers, plus additional fees for licensing, hosting and interface design by SpeechWorks, and additional outlays for phone lines. The total bill for the initial phase of the project, which took about six months to complete, was in the low six figures, according to Infantino.
Companies that have taken the plunge see voice access as a way to make the content for their Web sites pay off. Flooz.com, the New York proprietor of electronic gift certificates, expects to roll out a phone service by early October for ordering gift certificates that connects to its Web site. “It’s not the main way we get our business, but it can be an important customer-acquisition tool,” says Robert Levitan, Flooz’s CEO.
Technology vendors are sweetening the pot by waiving development or installation fees. For example, Flooz teamed up with NetByTel, a Boca Raton, Fla., company that offers private-label, outsourced voice services for Web sites, because the gift-certificate company didn’t have to pay anything up front. Instead, NetByTel will collect an undisclosed fee on transactions callers complete over Flooz’s phone service.
“If it doesn’t work out, we can discontinue it and it won’t be a big problem,” adds Levitan.
Other companies are using voice-activated phone interfaces to expand their Web-based customer service centers and cut call-center costs. Office Depot hired NetByTel to replace its automated customer-service telephone system. Since June, customers who call the retailer’s toll-free number to locate a store or order a catalog are directed to a NetByTel voice-automated system. The outsourcer connects the requests to Office Depot’s online back end.
By the end of the year, customers will be able to call, say their ID number and talk their way through the product catalog. Handling customer calls through a voice interface to the Web site costs about 84 per cent less than routing calls to live customer-service operators, calculates Ken Jackowitz, Office Depot’s VP of business systems.
To offset costs, some companies are weaving ads and in-house promos into their voice interfaces. But early adopters are working out basics: where to put spots, how long they should run and what types of voices are most appealing.
TALK IS STILL CHEAP
At this early stage, it’s uncertain who will be the biggest winners. Wireless carriers such as AT&T Wireless, Sprint PCS and Verizon have two advantages: an existing customer base and an established billing mechanism. Because of this, Web sites, voice portals and other technology vendors are barraging carriers with deals.
So far, no carriers have taken the plunge, though numerous pilot tests and negotiations are under way. Look for a few carriers to roll out programs late this year, followed by more in the first half of 2001.
Web heavyweights America Online, Excite, Lycos and Yahoo are rolling out wireless services, and at least some of them have voice on their agendas. AOL invested US$5 million in SpeechWorks and has stated it will use the company’s technology in whatever voice services it provides. Though the on-line giant won’t comment beyond that, industry observers say voice trials for AOL subsidiaries MapQuest and MovieFone are in the works.
Lycos struck a deal in May with Quack.com, a start-up in Sunnyvale, Calif., to create a voice-activated version of its MyLycos personalized information page. Lycos executives wouldn’t confirm they’re working with Quack.com, but say they’ll roll out some kind of voice interface by the third quarter or later.
Other major players could be waiting to see whether consumers will use their phones to call the Web. Or they may be sitting on the fence until they see which technology vendors end up on top.
“There’s no Yahoo in wireless yet, and people want to back a winner,” says Kevin Nelson, vice-president of marketing for Indicast, a Carlsbad, Calif., start-up that’s building private-label voice portals for wireless carriers. However, the longer the megaportals wait, the more leverage they’re giving upstarts.
The companies that have made the move seem happy with the results to date, while some are more comfortable taking their time. In any case, the people using voice access will have the final say.
“It needs to make [customers] feel confident, welcomed and taken care of,” says Office Depot’s Jackowitz. “And if it doesn’t, they won’t want to use it again.”