Microsoft is in talks to acquire voice recognition software provider Tellme Networks, according to a story published Monday by Internet news site CNET.com.

CNET cited unnamed sources familiar with the discussions.

Picking up the story, the Wall Street Journal reported that the deal could be worth up to $800 million.

A Microsoft spokesman on Tuesday, however, dismissed the reports as "rumor and speculation" and declined to comment further.

Tellme could be a good fit for Microsoft. The company sees voice-based interaction as one of the Web's next big frontiers.

Speaking last week at the Morgan Stanley technology conference in San Francisco, Microsoft business group president Jeff Raikes said the company expects that more than 100 million people will use its Office software to initiate telephone calls over the Web using the voice over Internet Protocol by 2010.

Microsoft also is building support for voice communications into some of its latest software. Office Communications Server 2007, for example, features hooks that allow customers to add VoIP capabilities to their existing server infrastructures.

Meanwhile, there are other signs of consolidation afoot in the voice recognition software industry. Last month, Nuance Communications announced its intention to acquire BeVocal, a developer of automated customer service solutions, for $140 million.