SDL, one of the big three in the language biz, paid $42.5 M for Language Weaver a few weeks ago.
Language Weaver, a statistical machine translation provider, is funded with spook money and is a creature of big defense spending on language automation. It is a money loser. As a business plan, this seems to work fine when funded by US taxpayers, but even the patience of defense spenders wears thin, and these guys have been losing money for a long time.
“Personally, I liked the university. They gave us money and facilities, we didn’t have to produce anything! You’ve never been out of college! You don’t know what it’s like out there! I’ve worked in the private sector. They expect results,” said Dr. Ray Stantz of Ghostbusters fame.
The guys at Language Weaver have had a tough sell to private business. Before the buy, the Language Weaver relationship with SDL was one of their success stories.
“The two companies have already integrated their solutions for several joint customers. So this is not something new SDL will be trying to do, it’s simply an extension that brings all the capabilities directly in-house.”
Mark Lancaster, CEO of SDL, takes the strategic view. “The internet is generating more and more content that needs to be managed, optimized and translated. And yet, most companies still translate less than 50% of their overall content. Most of the content on the web is still in English―probably about 80% and yet this will change and only 20% will be in English in a few years’ time.”
This is because the industry has failed to translate the internet. With over 80% of pages only in English, this content must be translated.
Or not. How much of it actually needs translation? Most of it is unread in English, so why spend a lot of money so that it can be unread in other languages too?
Mark’s PR guys add, ”The combination of both companies will help further drive machine translation and form an integral part of SDL’s vision for managing global content. SDL sees that the market will grow by cross-leveraging SDL and Language Weaver customers as well as technology and increasing customer choice to translate content more quickly. SDL also looks to grow the foothold that Language Weaver has in government. SDL’s strength in the commercial business arena will also be a benefit for Language Weaver.”
Huh? The only problem is that machine translation is a money-loser. Well, I guess what I mean to say is that it’s been a money loser for me, in part no doubt because the DARPA cash fire hose has always sprayed their dollars elsewhere. So I’m skeptical.
Analyst Tintin Stormont at Singer Capital Markets said the deal secured SDL’s position in the market and opened up potentially significant opportunities in other sectors like government. “This acquisition is quite strategic―as the amount of content online grows rapidly, machine translation will become an integral part of enterprises’ content creation and management strategy.”
Counter argument from my accountant, who is always saying, “Don’t do anything that Google does.”
So rather than wasting any more time dumping on this transaction which I don’t really understand anyway, I’ll instead quote the bejesus out of Renato Benenatto, who I think has nailed it pretty well.
“In recent months, I have been thanking SDL for the great job that they are doing at alienating their technology customers by providing sub-par customer service and support…. SDL has been very successful at irritating translators, LSPs, and final buyers with their technology approach….
‘This is a good story that will boost SDL’s stock, just as the IBM (NYSE:IBM) Websphere MT deal boosted Lionbridge’s (NASDAQ:LIOX) stock to the levels that it is today (from one dollar to $5.28). This is a good story that helps SDL to further position itself as a software company instead of a service company.
“If the patterns of previous acquisitions prevail, SDL will get very excited about Language Weaver, but after the excitement wears off, the product will be abandoned to its own fate. So Language Weaver clients who already work with Trados, TMS, and other of their products already know the level of service provided by SDL, and should maybe run for the hill when they come offering Language Weaver solutions.”
Trados. You know Trados, the default translation memory tool for the translation business? Personal disclosure: It is a trigger word for my syndrome…these fits I have. I was able to reach beyond the veil (one of my Ghost Hunters connections) and ask Curly, formerly of the Three Stooges, to dramatize what happens to me whenever I hear “SDL Technology Offering.”
Thanks for letting me share this deep, dark secret, and for helping me to achieve closure.
Plus special thanks to Renato for writing most of my post for me.