Dragon Systems is founded
James and Janet Baker, with Robert Roth and Paul Bamberg, founded Dragon Systems, a speech recognition technology company.
Why it matters
The line from an academic bet on probability to a consumer product acquired a commercial owner for the first time.
The company worked for fifteen years before a product that could recognise continuous speech: in 1997 its NaturallySpeaking came out as the first large-vocabulary, continuous-speech, general-purpose dictation system. DragonDictate came first, in 1990, requiring pauses between words. The story ended badly: in June 2000 Dragon was bought for $580 million in stock by Lernout & Hauspie Speech Products. L&H had overstated its earnings, admitted $373 million of improperly recorded revenue and went bankrupt in November 2000, and the founders' L&H shares became worthless. From other parties to the affair they later recovered over $75 million in settlements.