Microsoft is buying SwiftKey: It’s now official. The UK-based company, best known for its predictive keyboard app, will slot under Redmond’s research unit, reporting to Harry Shum.

At $250 million, it’s a decent enough exit for TouchType Ltd.’s VCs and co-founders (pictured). But why does Microsoft need another keyboard app? (Hint: It doesn’t.)

In IT Blogwatch, bloggers try to predict the future.

Your humble blogwatcher curated these bloggy bits for your entertainment.



The rumors were flying hours before it was official. Tim Bradshaw and Murad Ahmed broke the story—Microsoft steps up AI push with Swiftkey deal:

War for talent

Microsoft has acquired London-based Swiftkey, maker of a predictive keyboard...installed on hundreds of millions of smartphones, in a deal worth $250m.

…

The pair [of founders] own a substantial minority stake in the company after raising just over $20m...from backers including Accel Partners, Index Ventures and Octopus Investments.

…

The start-up is the latest in a string of UK companies with advanced artificial-intelligence capabilities to be snapped up. ... A person close to the deal said: “There’s a war for talent in artificial intelligence, and...the best talent is in the UK.”

…

Swiftkey’s technology suggests the next word a user is about to type. ... The company says its technology learns slang, nicknames and even which emojis its users prefer. ... [It] is also used by astrophysicist Stephen Hawking.



Microsoft could use the pre-installed SwiftKey app as a Trojan. At least, according to Ingrid Lunden and Mike Butcher—Microsoft Confirms SwiftKey Acquisition:

Window of opportunity

The terms of the deal are not being disclosed but sources [say] it’s $250 million in cash [and] Microsoft beat out other interested buyers, which...included Apple.

…

Microsoft wants grow the use of its Cortana digital assistant on Android. [SwiftKey] could be the gateway [to] Cortana use without having to install a standalone app.

…

More to the point: joining...Microsoft will give [it] the space to develop tech that may fit into a bigger business plan...and becoming a part of the company’s ambitions to own the mobile productivity space.

…

From what we understand, some of [the VCs] realised there was a window of opportunity with Microsoft when [it] started acquiring other companies focused on mobile productivity and intelligent processing. ... SwiftKey then proceeded to head-hunt James Bromley...as COO to shepherd the process.



As always, companies involved choose their words carefully. Jon and Ben speak out, in SwiftKey is joining Microsoft:

Android and iOS

We’re excited to announce an important milestone.

…

Microsoft’s mission is to empower every person and every organization...to achieve more. Our mission is to enhance interaction between people and technology. ... These are a perfect match.

…

Eight years ago we started out as two friends with a shared belief that there had to be a better way of typing on smartphones.

…

Our number one focus has always been to build the best possible products. ... This will not change. Our apps will continue to be available on Android and iOS, for free.



He's the boss of you now. He's Microsoft EVP Harry Shum—Microsoft acquires SwiftKey in support of re-inventing productivity ambition:

Technology, talent and market position

In this cloud-first, mobile-first world, SwiftKey’s technology aligns with our vision for more personal computing experiences that anticipate our needs.

…

Together we can achieve orders of magnitude greater scale than either of us could have achieved independently.

…

We’ll continue to develop SwiftKey...as well as explore scenarios for the integration of the core technology. ... In the coming months, we’ll have more to share about how we’ll integrate SwiftKey technology with our...Word Flow technology for Windows.

…

I’m extremely excited about the technology, talent and market position SwiftKey brings.



So, is this just the latest in a line of Microsoft purchases of popular apps? Abner Li says it is not—Microsoft purchases popular keyboard maker SwiftKey for $250 million:

Highly unlikely

While this deal could be seen as just the latest in a line of Microsoft purchases of popular apps, it is not.

…

In 2014, Google purchased another UK based startup working on AI [Deepmind] for £400m. ... SwiftKey [didn't] find a reliable business model. Initially, SwiftKey was a paid app before switching to...freemium.

…

Microsoft recently ported their Windows Phone keyboard to iOS. It’s highly unlikely that the company needs more keyboard apps.



So perhaps it's a recognition that Word Flow is lacking in neuro-linguistics? VC Rich Wong offers additional insight—Congratulations to the SwiftKey Team on its Acquisition by Microsoft!:

Yet another example

We’re still in the early days of NLP and predictive analytics technology moving from one-off use-cases to becoming embedded deeply in the workflow.

…

The key insight was that building a better keyboard [needed] software that understands how people use language to make more natural predictions. ... The more one uses this software, the more it learns and customizes.

…

The company’s United Kingdom roots, grounded in research from Cambridge University, are yet another example of how great entrepreneurs...are now creating world-class software companies all over the world.



But trust the UK tech press to see a fly to drop in the ointment. Chris Merriman makes merry, with Microsoft buys UK AI keyboard app SwiftKey for £174m:

Cornered, wounded animal