It's another day, another acquisition for Microsoft. The software company has just purchased Wand Labs, a startup that specializes in chatbots and messaging apps, for an undisclosed amount.

Microsoft's move to acquire Wand Labs shows the company is serious about developing "conversational intelligence." This is one feature Office 365, Cortana and Bing might find indispensable in this age where human language is continuously being leveraged in the area of artificial intelligence.

"This acquisition accelerates our vision and strategy for Conversation as a Platform," writes David Ku, corporate vice president of Microsoft's Information Platform Group, in a blog post.

Smarter Conversations with A.I.

Search engines and virtual assistants are continuously relying on the semantic nuances of people's queries and voice commands. However, these human-to-machine and machine-to-human interfaces, based on language, create one major challenge: how to make this type of "conversation" smarter and more natural.

This is where Wand Labs comes in. The startup, which began in 2013, has been deep in the work of "predictive assistance and delegated authority," which are, in short, the very grammar of Bing and Cortana.

The point, Ku explains, is about "connecting people to knowledge, information, services and other people in more relevant and natural ways."

Given the startup's expertise and Microsoft's vision, Wand Labs seems to be a "natural fit" with the software company, says Vishal Sharma, CEO of Wand, "especially in the area of intelligent agents and cognitive services."

Back in March, Microsoft CEO Satya Nadella first heralded plans for developing conversational intelligence at the company's Build 2016 conference. Now, the acquisition sets Microsoft and Wand Labs full steam ahead in the next phase of their journey.

Too Little, Too Late?

With smarter conversations, on both search and messaging platforms, now "redefining the information industry," is Microsoft's move to get into the game and boost conversation a little too late?

In April, Facebook was already well on its way to providing businesses and developers a chance to create chatbots for the Facebook Messenger. Following the same logic, these bots rely on nuanced human language to decipher what it is exactly the customers want: from answers to search queries, to confirming reservations, to closing transactions.

All this, of course, entails on the part of the machine so much more than understanding the usual templated discourse in order to provide intelligent "customer service, content and interactive experiences." One setback, however, is that the interface is reportedly buggy.

Add to that Google's own initiative of deploying artificial intelligence in its newly released Allo messaging app and we've got a heavily crowded marketplace of intelligent conversation apps. The combination of machine learning and encrypted messaging, however, makes Google's alternative tough to beat.

So now, where does this leave Microsoft in the battlefield of A.I. integrated conversations?

Microsoft can play to its own strength as a software company foremost: by offering an alternative that not only crushes the bugs but also, more importantly, boosts productivity with Office tools — all while staying within the same messaging platform.

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