I recently had the opportunity to speak with Jeff Caitlin, CEO of Lexalytics Ltd. about the Lexalytics/Infonic merger. Although the merger occurred several months ago, it was actually good timing, because Jeff could explain a bit more about what is happening with the newly merged company, what the products look like, where the company is heading and so on.

For those of you not familiar with the two companies, Lexalytics is a five-year-old firm best known for sentiment analysis. In fact, its technology is embedded in a number of online services that deal with customer sentiment and reputation management, including Cymphony. It also OEMs its software to some well-known search vendors such as Fast (now Microsoft). Lexalytics merged with the text analytics division at Infonic in late July 2008 in order to gain momentum in the market. Infonic, a publicly traded UK based company previously named Corpora plc, focuses on document management and other software to enable organizations to capture and share information. On the text analytics side, it has several large customers from the financial services vertical including Thomson Reuters and Dow Jones Factiva.

Lexalytics Ltd. now offers several products to the market. These include:

• Salience: This is the core analytics product upon which the other products are based. It enables entity extraction, relationship extraction, sentiment analysis, and document summarization. It also provides pronoun handling which means that the software can distinguish, for example, that "John Smith" is the same person as "He" in the sentence, "He is a great leader." It includes a series of entity libraries that contain people, companies, and brands. The company also provides a sentiment toolkit to enhance a sentiment dictionary. This means that the user can input their own sentiment rules to pick up phrases specific to their industry such as "missed expectations" in the financial services sector is negative.
• Acquisition Engine: This tool gathers content from news feeds, blogs, websites or local file systems. It includes a context free HTML cleaner that strips off all of the navigation bars, ads, and so on that can be found on web pages so the data that gets to the text analytics engine is cleaner. It actually uses the Salience Engine to grab the data. It can also gather data from structured ODBC compliant databases.
• Analytics Tool Kit: This tool kit enables the user to build visualizations by embedding information into office products such as Excel and PowerPoint.
• Classifier: This tool buckets content. The company offers three classification methods: keyword, query, or training

Lexalytics Ltd. plans to release version 4.0 of Salience in October. This upgraded engine is a hybrid of the two text analytics products. For example, it will incorporate Infonic's tonal analyzer that would be able to assign a positive sentiment to a phrase such as "disgustingly pretty" rather than a neutral score (i.e. disgusting = negative, pretty = positive). It will also provide new functionality such as improved extraction for entities such as people, companies, and brands as well as the ability to produce meta-themes (i.e. concepts such as computer hardware or software).

Challenging other players?
My initial impression was that since Lexalytics 1) puts a big emphasis on pulling data from websites, blogs and other online sources and 2) seems to have a heavy focus on entities such as people, company, brand I could see it competing with other pure-play vendors including Clarabridge and Attensity on some deals, but not necessarily deals that involve sifting through call center notes or customer surveys, etc. I asked Jeff about this. His response was that although the company hasn't focused on call center and customer surveys over the last few years, it is now starting to see an increase in interest in both of these areas. He said that while the company many not directly challenge players like Clarabridge, it may partner with others that sell solutions in these spaces.

Sentiment analysis is a hot area right now in text analytics. In a short survey Hurwitz & Associates conducted this past summer, Voice of the Customer and Competitive Intelligence were the top two areas of interest noted by end-users planning to deploy text analytics. Both of these would utilize sentiment analysis. There are a number of new players entering the market that are focused specifically on sentiment analysis. Some are still quite small but competition in this space will no doubt increase. The merger of Lexalytics with Infonic should help the combined company compete more effectively because it expands its footprint and enhances its capabilities.