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It's Time for Nuance's Paul Ricci to Go: Opinion

NEW YORK ( TheStreet) -- Nuance (NUAN - Get Report) is not a commonly followed stock compared to the titans of tech. Yet, at a $6 billion market cap, it's hardly a micro-cap.

Most people who know the company know that it's the leader in voice control systems that power such apps as Apple's (AAPL).

It's a textbook industry roll-up.

When I once worked in the voice industry -- which brought us Flipboard founder and former Twitter director Mike McCue as well as new Xiaomi executive Hugo Barra -- the two big titans of voice apps were Nuance and SpeechWorks. Both had splashy dot-com era IPOs and then struggled to keep revenue growing through the desert years of 2001 to 2003.

Suddenly -- and seemingly out of nowhere -- both of these companies and scores of smaller private ones were bought up by a company no one in the industry had ever really heard of: ScanSoft.

ScanSoft was led by a guy no one had ever heard of: Paul Ricci.

Ricci's first big acquisition was buying the Lernout & Hauspie assets out of bankruptcy in 2001. Two years later, he bought SpeechWorks, which was also in the Boston area. Two years after that, he "merged" with Nuance and -- smartly -- took its name.

Ricci, now 57, is known for being tough as nails and a guy with no real strategy except just buy revenue and cut out costs. If you're looking for a coherent corporate strategy, keep looking.

As a result, Nuance is now a multi-headed corporate beast with a health care transcription business, an enterprise one and a mobile business sold to carriers, Samsung and Apple.

It shouldn't be. It should be broken up into three separate businesses so investors can place their own value on each business. But Ricci won't split the baby -- and that's why someone else must.

It's time for Ricci to go. He paid himself $37 million last year, even though Nuance shares have declined 23% in value in the last 12 months.
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