Breaking news! SDL is buying Language Weaver for a bunch of cash (US$42.5 Million). Read all about it here. Well I can’t be a blogger in the translation industry if I don’t write something about this so here goes–my own thoughts on this deal:

  • My first thought was “what, only 42 million? Why so little?” I mean Language Weaver is one of the top MT vendors. Shouldn’t they be worth more? What does this mean for the MT industry as a whole? I guess the valuations of the other MT vendors are much lower now. After SDL bought Language Weaver and Lionbridge hooked up with IBM, it would appear that other vendors that are dreaming of an exit face a much narrower field than before.
  • A Great Return on Investment: it appears that the folks that invested in Language Weaver in its first years of operation (2002 to 2004) got a fantastic return on their investment. From what I was able to learn on the Internet, a total of between US$6.7 million and US$9 million were invested in Language Weaver since the company was founded in 2002 (read more here). Two rounds of VC funding in 2002 and 2004 yielded about $4.7 million. Another US$2 million was received as an Advanced Technology Program award from the U.S. Department of Commerce’s NIST agency. And In-Q-Tel, a VC owned by the CIA, provided another round of funding (undisclosed amount) in 2004. So the ROI to the investors was between 500% to 700%. Not too shabby.
  • Why is the CIA bailing on Language Weaver? When Language Weaver started in 2002, 9/11 was fresh on everybody’s mind and the US government needed to develop language technology to get more intelligence about Bin Laden. The US government is still investing in translation technology, such as the contract awarded last week to the defense company Raytheon to help troops rapidly translate foreign language text while on the battlefield. So why not Language Weaver? Perhaps their technology is no longer of interest to the US government and the folks at the CIA want to cash in so they can invest in more interesting projects.
  • Why did SDL buy Language Weaver? They already integrated Language Weaver MT into Trados Studio 2009 and other TMS products. They have been acting as Language Weaver resellers for over a year now. Will owning the company allow SDL to sell more MT software systems?