Voice recognition software company General Magic is to close. General Magic, which was once had a market capitalisation of more than $2billion, took the decision to cease operations after efforts to obtain additional financing or to complete a strategic merger or acquisition were unsuccessful. The company blamed current adverse economic and market conditions along with the continued slowdown in IT spending for its demise.
Most of the company’s employees will leave immediately. A small team of General Magic employees will be retained for 60 to 120 days to manage the sale of the company’s assets and the resolution of obligations to the company’s creditors. A 15-member task force of General Magic employees will also be retained for approximately 60 days at OnStar’s expense to facilitate a smooth transfer of the operation and support of the OnStar Virtual Advisor to another OnStar vendor.
Numbered among the company’s assets are the magicTalk Enterprise Platform, including the just completed Version 2.0 of that software, a portfolio of legacy software and 35 patents and patent applications, including what the company believes are fundamental patents of voice user interface and agent technologies. The company intends that the proceeds from the sale of its assets in connection with the winding up of its business will be used to pay its creditors, but does not expect that there will be assets remaining for distribution to holders of its common or preferred stock.
A combination of factors led us to this decision, said Kathleen Layton, General Magic’s president and CEO. Current adverse economic and market conditions along with the continued slowdown in IT spending were significant factors in preventing us from raising money or facilitating a merger or acquisition. Without the immediate availability of additional funding, our Board has reluctantly concluded that the company can not continue to operate, she said.