Lernout & Hauspie
Encyclopedia
Lernout & Hauspie Speech Products, or L&H, was a leading Belgium
-based speech recognition
technology
company, founded by Jo Lernout and Pol Hauspie, that went bankrupt
in 2001. The company was based in Ypres
, Flanders
, in what was then called the Flanders Language Valley (mimicking the Silicon Valley
).
(LHSP), and was also quoted on the now-defunct Brussels-based EASDAQ exchange. Its headquarters were in Ieper, Belgium
, and in Burlington, Massachusetts
. At its peak, Lernout & Hauspie had a market capitalization of almost US$
10 billion.
Flanders played an important role in investing in the company and the surrounding Flanders Language Valley. Lernout & Hauspie quickly became Flanders' pride.
It acquired a number of its smaller competitors, including text-to-speech developer Berkeley Speech Technologies, in 1996. During March-April 2000 Lernout & Hauspie acquired Dictaphone
for nearly US$1 billion, then acquired Dragon Systems shortly thereafter. Lernout & Hauspie provided the voice recognition technology needed to propel Dictaphone's voice recognition enhanced transcription system (started by a company called Articulate Systems and sold and supported by a company called The MRC Group - later Fonix before becoming part of L&H).
For some time Lernout & Hauspie was dogged by rumours of financial impropriety, and in early 1999 the Wall Street Journal, ran allegations in its Heard on the Street column, by Goldman Sachs
analyst Robert Smithson, that earnings had been overstated. Further investigation by Wall Street Journal staffer Jesse Eisinger led to the revelation on 8 August 2000 of a major financial scandal
involving fictitious transactions in Korea
and improper accounting methodologies elsewhere. In April 2001 founders Jo Lernout and Pol Hauspie, as well as former CEO Gaston Bastiaens
, were arrested in what is considered one of the largest corporate scandals in history prior to Enron
. Lernout & Hauspie finally went bankrupt on 25 October 2001 after having struggled for a year.
The technology was bought by Nuance Communications
(known then as ScanSoft) and Vantage Learning after the bankruptcy. Nuance acquired all of the speech technologies and Vantage acquired all of the proofing, spelling, and linguistic search technologies.
Many people, especially in West Flanders, were blinded by the company's success and lost large sums of money on Lernout & Hauspie stock. The Flanders regional government became a major Lernout & Hauspie investor through a venture capital
arm. During one of Lernout & Hauspie's cash shortages, it guaranteed 75% of a bank loan to the company. Investors and taxpayers alike were hit hard when the company went bankrupt.
Lernout and Hauspie speech recognition is now used in the "Speech" option in the control panel of Microsoft Windows XP and is abbreviated as LH. In addition, Microsoft Office
uses certain elements of a grammar checker developed by L&H, which is mentioned in the About window. The revenues of Nuance Communications
grew sharply from $17.1 million in third quarter of 2001, to $216 million in Q3 2008.
On 20 September 2010, co-founders Jo Lernout and Pol Hauspie, as well as Nico Willaert, former vice chairman, and Gaston Bastiaens, former chief executive officer, were each sentenced to 5 years prison (of which 3 years effective and 2 years probationary) for fraud by the Ghent Court of Appeals. However, due to the endemic problem of overcrowding in Belgian prisons and the policy of not executing sentences of 3 years or less, it is quite unlikely any of them will actually serve any time.
"Lernout & Hauspie Michelle" and "Lernout & Hauspie Michael" are text-to-speech voices created by Lernout and Hauspie and included in Microsoft Office 2003
.
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
-based speech recognition
Speech recognition
Speech recognition converts spoken words to text. The term "voice recognition" is sometimes used to refer to recognition systems that must be trained to a particular speaker—as is the case for most desktop recognition software...
technology
Technology
Technology is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function. It can also refer to the collection of such tools, machinery, and procedures. The word technology comes ;...
company, founded by Jo Lernout and Pol Hauspie, that went bankrupt
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
in 2001. The company was based in Ypres
Ypres
Ypres is a Belgian municipality located in the Flemish province of West Flanders. The municipality comprises the city of Ypres and the villages of Boezinge, Brielen, Dikkebus, Elverdinge, Hollebeke, Sint-Jan, Vlamertinge, Voormezele, Zillebeke, and Zuidschote...
, Flanders
Flanders
Flanders is the community of the Flemings but also one of the institutions in Belgium, and a geographical region located in parts of present-day Belgium, France and the Netherlands. "Flanders" can also refer to the northern part of Belgium that contains Brussels, Bruges, Ghent and Antwerp...
, in what was then called the Flanders Language Valley (mimicking the Silicon Valley
Silicon Valley
Silicon Valley is a term which refers to the southern part of the San Francisco Bay Area in Northern California in the United States. The region is home to many of the world's largest technology corporations...
).
History
Lernout & Hauspie was founded in 1987 by Jo Lernout and Pol Hauspie. After a difficult start, it quickly grew, and, in 1995, it went public on the NASDAQNASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
(LHSP), and was also quoted on the now-defunct Brussels-based EASDAQ exchange. Its headquarters were in Ieper, Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
, and in Burlington, Massachusetts
Burlington, Massachusetts
Burlington is a town in Middlesex County, Massachusetts, United States. The population was 24,498 at the 2010 census.- History :It is believed that Burlington takes its name from the English town of Bridlington, however this has never been confirmed....
. At its peak, Lernout & Hauspie had a market capitalization of almost US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
10 billion.
Flanders played an important role in investing in the company and the surrounding Flanders Language Valley. Lernout & Hauspie quickly became Flanders' pride.
It acquired a number of its smaller competitors, including text-to-speech developer Berkeley Speech Technologies, in 1996. During March-April 2000 Lernout & Hauspie acquired Dictaphone
Dictaphone
Dictaphone was an American company, a producer of dictation machines—sound recording devices most commonly used to record speech for later playback or to be typed into print. The name "Dictaphone" is a trademark, but in some places it has also become a common way to refer to all such devices, and...
for nearly US$1 billion, then acquired Dragon Systems shortly thereafter. Lernout & Hauspie provided the voice recognition technology needed to propel Dictaphone's voice recognition enhanced transcription system (started by a company called Articulate Systems and sold and supported by a company called The MRC Group - later Fonix before becoming part of L&H).
For some time Lernout & Hauspie was dogged by rumours of financial impropriety, and in early 1999 the Wall Street Journal, ran allegations in its Heard on the Street column, by Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
analyst Robert Smithson, that earnings had been overstated. Further investigation by Wall Street Journal staffer Jesse Eisinger led to the revelation on 8 August 2000 of a major financial scandal
Corporate scandal
A corporate scandal is a scandal involving allegations of unethical behavior by people acting within or on behalf of a corporation. A corporate scandal sometimes involves accounting fraud of some sort...
involving fictitious transactions in Korea
Korea
Korea ) is an East Asian geographic region that is currently divided into two separate sovereign states — North Korea and South Korea. Located on the Korean Peninsula, Korea is bordered by the People's Republic of China to the northwest, Russia to the northeast, and is separated from Japan to the...
and improper accounting methodologies elsewhere. In April 2001 founders Jo Lernout and Pol Hauspie, as well as former CEO Gaston Bastiaens
Gaston Bastiaens
Gaston Bastiaens is a Belgian engineer and businessman. As a vice president of Philips Electronics, he was responsible for the Compact Disc as well as for CD-i, CD-ROM, Philips' contributions to the MPEG standard and the foundations for the DVD.After graduating with distinction from the Catholic...
, were arrested in what is considered one of the largest corporate scandals in history prior to Enron
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
. Lernout & Hauspie finally went bankrupt on 25 October 2001 after having struggled for a year.
The technology was bought by Nuance Communications
Nuance Communications
Nuance Communications is a multinational computer software technology corporation, headquartered in Burlington, Massachusetts, USA, that provides speech and imaging applications...
(known then as ScanSoft) and Vantage Learning after the bankruptcy. Nuance acquired all of the speech technologies and Vantage acquired all of the proofing, spelling, and linguistic search technologies.
Many people, especially in West Flanders, were blinded by the company's success and lost large sums of money on Lernout & Hauspie stock. The Flanders regional government became a major Lernout & Hauspie investor through a venture capital
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
arm. During one of Lernout & Hauspie's cash shortages, it guaranteed 75% of a bank loan to the company. Investors and taxpayers alike were hit hard when the company went bankrupt.
Lernout and Hauspie speech recognition is now used in the "Speech" option in the control panel of Microsoft Windows XP and is abbreviated as LH. In addition, Microsoft Office
Microsoft Office
Microsoft Office is a non-free commercial office suite of inter-related desktop applications, servers and services for the Microsoft Windows and Mac OS X operating systems, introduced by Microsoft in August 1, 1989. Initially a marketing term for a bundled set of applications, the first version of...
uses certain elements of a grammar checker developed by L&H, which is mentioned in the About window. The revenues of Nuance Communications
Nuance Communications
Nuance Communications is a multinational computer software technology corporation, headquartered in Burlington, Massachusetts, USA, that provides speech and imaging applications...
grew sharply from $17.1 million in third quarter of 2001, to $216 million in Q3 2008.
On 20 September 2010, co-founders Jo Lernout and Pol Hauspie, as well as Nico Willaert, former vice chairman, and Gaston Bastiaens, former chief executive officer, were each sentenced to 5 years prison (of which 3 years effective and 2 years probationary) for fraud by the Ghent Court of Appeals. However, due to the endemic problem of overcrowding in Belgian prisons and the policy of not executing sentences of 3 years or less, it is quite unlikely any of them will actually serve any time.
"Lernout & Hauspie Michelle" and "Lernout & Hauspie Michael" are text-to-speech voices created by Lernout and Hauspie and included in Microsoft Office 2003
Microsoft Office 2003
Microsoft Office 2003 is a productivity suite written and distributed by Microsoft for their Windows operating system. Released on October 21, 2003, it was the successor to Office XP and the predecessor to Office 2007.- Overview :...
.
See also
- Dragon NaturallySpeakingNaturallySpeakingDragon NaturallySpeaking is a speech recognition software package developed and sold by Nuance Communications for Windows personal computers. The most recent package is version 11.5, which supports 32-bit and 64-bit editions of Windows XP, Vista and 7. The Mac OS version is called Dragon...
- Speech synthesisSpeech synthesisSpeech synthesis is the artificial production of human speech. A computer system used for this purpose is called a speech synthesizer, and can be implemented in software or hardware...
- List of Ig Nobel Prize winners#2002 Recipient of the 2002 Ig Nobel Prize in Economics "for adapting the mathematical concept of imaginary numbers for use in the business world"
External links
- one of Lernout & Hauspie's old websites, archived on the Internet Archives.
- "How High-Tech Dream Shattered in Scandal at Lernout & Hauspie", an article from the WSJ (December 7, 2000) (last cached on Apr 20 2006 in Internet Archives)