Microsoft buys Wand Labs to go deeper into chat bots

Chat bots have become all the rage this year, with companies like Facebook and Kik making their mark

Financial trends and news by Steven Loeb
June 16, 2016
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Microsoft may have just made the largest acquisition in social media history, but that doesn't mean the company is slowing down one bit.

The company announced on Thursday that it has acquired Wand Labs, a messaging app developer. No financial terms of the deal were disclosed. 

Going forward, Wand Labs will be shutting down, and Microsoft will be using the technology, and the team, to move forward with its strategy for Conversation as a Platform, which Satya Nadella introduced at the Build 2016 conference in March of this year.

That included making tools for building bots available to developers, and then linking those bots to digital personal assistants, such as Cortana.

"Wand Labs’ technology and talent will strengthen our position in the emerging era of conversational intelligence, where we bring together the power of human language with advanced machine intelligence — connecting people to knowledge, information, services and other people in more relevant and natural ways," David Ku, Corporate Vice President, Information Platform Group at Microsoft, wrote in a blog post.

"It builds on and extends the power of the Bing, Microsoft Azure, Office 365 and Windows platforms to empower developers everywhere."

For Wand Labs, being acquired by Microsoft means that the team gets to become part of a company that is further along in the machine intelligence space. 

"I’m proud of the work my team has done and what we’ve already accomplished in this emerging space – and I’m delighted to be joining a company that shares our passion and enthusiasm for this new era where conversation is the central focus. Making experiences for customers more seamless by harnessing human language is a powerful vision and one that motivates me and my team," Vishal Sharma, CEO of Wand Labs, wrote in a note on the company's homepage

"Our deep experience with semantics, messaging and authority are a natural fit for the work already underway at Microsoft, especially in the area of intelligent agents and cognitive services."

Microsoft's experiments with chat bots and machine intelligence haven't exactly been smooth sailing so far. Earlier this year, the company released Tay, an artificial intelligence-powered chatbot, which started mimicking the offensive behavior of Twitter users. The company eventually had to take it down and apologize

The company has obviously not given up on the space, and more recently released a bot called Rowe, which gathers articles that the users will want to read based on their interests, with personalized suggestions based on a user's social media likes. 

Founded in 2013, Wand Labs had raised $2.67 million in venture funding from investors that included Keval Desai, partner at InterWest Partners; Ben Ling, investment partner at Khosla Ventures; and Arif Janmohamed, partner at Lightspeed Venture Partners.

The rise of chat bots

One of the most interesting trends in the first half of this year has been the number of companies, particularly in the social space, that have been turning to bots. Companies like Facebook, Shopify and Kik have been pointing to bots as the future of social interaction,.

Kik, for example, launched its own bot store in April, following its purchase of fashion advice bot Blynk in December. The Bot Shop features bots from a list of Kik's partners, including Funny Or Die, Riffsy, Sephora, Vine, and The Weather Channel.

In April, Shopify bought chat bot Kit CRM, a virtual marketing assistant that leverages messaging to help businesses market their online stores.

Kit can build Facebook ads targeted to the audience most likely to buy, and it can also build carousel ads to market several products at once. Kit can also update fans with Facebook posts and email marketing campaigns when there are new products to showcase. And it can send personalized thank you emails to new and repeat customers after a purchase to build brand loyalty.

The acquisition of Kit came only a day after Shopify announced that it would be integrating with the new Facebook Messenger Platform, which gave tools to 50 million businesses so that they can build their own chat bots to reach the 900 million users on Facebook Messenger.

Last month, Google unveiled smart messaging app Allo, which has Smart Reply built in, so users can respond to messages without typing a single word. Smart Reply learns over time and will show suggestions that are in the user's style. It also features the Google assistant. 

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