Mobile

How Vlingo’s mobile personal assistant makes money

vlingoWe’ve been promised for a while now that our phones will become our personal assistants. Executives from Cambridge, Mass.-based Vlingo sat down with me this week to talk about how they’ve delivered on that promise — and started turning it into real revenue.

It seems like all the big guys are trying to get into this business. The incentive, as a Googler put it when the company launched a similar service last year, is that voice is much more natural than typing as a way to interact with your phone. Apple, meanwhile, showed its interest by acquiring a startup called Siri. And Microsoft included voice commands on Windows Phone 7.

The difference, according to Vlingo’s vice president of business Hadley Harris, is that the startup has built all its basic technology, including speech recognition (something that Siri outsourced) and the “intent engine” that allows the app to translate your words into actions that it understands. Vlingo is working with other companies to integrate a wide range of apps into the system, so that you can use your voice to buy a plane ticket off travel site Kayak or check your updates on Facebook.

Vlingo has been downloaded 7 million times, Harris said. BlackBerry users represent most of those downloads, since that’s the phone that Vlingo focused on first, but iPhone and especially Android are catching up. The company’s strategy is to release new features on Android first, then port them to other phones as resources and technology allow.

The app is free, so Vlingo makes money through advertising and revenue sharing with its partners. Specifically, Harris told me it currently earns $7.74 for every 1,000 Web searches, $49 for every 1,000 local searches, and $24 for every 1,000 “other” monetizable actions, such as a ticket purchase on Kayak. With users performing an average of 30 actions every month, Harris said Vlingo is making about 14 cents per user per month.

That might seem a little low, Harris acknowledged, but the plan is to dramatically increase both the number of users and the number of actions over the next year. Most promisingly, he said Vlingo has made deals with a number of Android handset manufacturers who don’t want to direct all of their usage to Google services. (He said it’s too early to reveal who the manufacturers are.) Not only will that put Vlingo on more phones, it will also make the application more prominent on those phones by turning it into the default app whenever you want to use voice commands.


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