When Daniel Marcu and Kevin Knight began studying computerized language translation out of their engineering lab at USC, the goal was to develop programs that would automatically turn Somali, Arabic and other languages into English – at a fraction of the time and cost that it would take a human to do the work.

When their lab received a grant from the Department of Defense in 1999, it was proof that their technology – known as machine translation engines – could be a valuable resource in helping the government translate mountains of intelligence documents.

Then came Sept. 11, 2001. After terrorists crashed planes into the World Trade Center and the Pentagon, it was widely recognized that American intelligence was insufficient and needed dramatic improvement.

So when Marcu and Knight approached a number of government agencies in 2003 with their new translation company, Language Weaver Inc., they quickly found customers who needed their product.

“The first market we targeted was the U.S. government,” said Marcu, the company’s co-founder and chief operating officer. “It was a good strategy because, at the time, they didn’t have good machine translation engines.”

Language Weaver’s software uses a process called statistical machine translation to turn a word or phrase in English into a series of numbers and then translate those numbers into another language in a matter of seconds. At first, the software translated only Arabic and Somali, languages the company assumed would be most important to the government. Today, the software translates 35 different languages. In simplest terms, customers pay 25 cents to translate 100 words using Language Weaver’s technology, compared with $21 for a human translation of those same 100 words.

Now that the 111-employee company is moving from government contracting into commercial work, its clients include Dell and Intel. The computer giants use it to translate their help websites. It has also sold its services to many other online sites and Internet companies for translation of user-generated comments and home pages. The company’s recent $42.5 million sale to Maidenhead, England, language service company SDL PLC gave it money to invest toward future growth.

Commercial translations

But at first, the company struggled to break into the commercial market because of its limited staff and government focus.

“One of the issues in the language technology market is that many of the companies are small and have limited resources,” said Don DePalma, a chief research officer who covers translation companies for Boston market research firm Common Sense Advisory. “Language Weaver had a hard time getting the product to commercial buyers, which is where the growth is. Its sales force was rather small and oriented only toward the U.S. government.”

To restructure the company and find a way to break into the commercial space, Marcu and Knight, the company’s chief scientist, hired Mark Tapling as chief executive in 2008. In a phase that Marcu refers to as “debugging the past,” Tapling hired a sales team that could sell to both government and commercial clients.

The company, headquartered at a spacious office in the Howard Hughes Center in southwestern Los Angeles, also opened a Language Weaver office in Romania to offshore its software development team. What started as a three-person office in Cluj-Napoka has grown to 50.

Then, Tapling set his sights on finding commercial customers for Language Weaver’s translation product. The company started by going after large computer makers and Internet companies that would benefit from language translations for their help desk and customer support pages. Language Weaver also grants access to its technology to travel sites such as Trip Advisor, a Newton, Mass., travel planning website that uses the software to translate its user-generated comments, and news websites such as Dow Jones Factiva, which uses Language Weaver to translate news articles.

Right Now, a Bozeman, Mont., customer service company, partnered with Language Weaver last year to translate the website for one of its clients, a popular social networking website that the company would not name. Language Weaver’s technology keeps up with the website’s changing content faster and more accurately than human translators, said Brian Curran, vice president of Right Now.

“The translation is never going to be perfect,” Curran acknowledged. “But if you can quickly translate it and use it, that makes a big difference.”

The software is constantly upgraded and updated; as the program encounters new words, it puts them in context and “learns” how to translate them. Also, the company has a system called Trust Score that self-evaluates the accuracy of the translations.

Revenue growth

Tapling opted to sell Language Weaver to SDL, a big public company in England, rather than seek investors.

“We see the SLD acquisition as a financing event,” Tapling said. “Every employee from Language Weaver has transferred over and we’re plowing ahead with a lucrative dividend that allows us to finance our business plan.”

The sale gave Language Weaver access to SDL’s clients. The sale also helps SDL because it gives the company an entry with Language Weaver’s government customers. But above all, the merger was driven by Language Weaver’s technology.

“Information on the web is changing so quickly that you can’t keep up with that new content unless you have some sort of automated translation system,” said SDL Chief Executive Mark Lancaster. “We looked at a number of machine translation businesses and Language Weaver had the most superior technology.”

Because of its expansion into the commercial market, Language Weaver’s revenue was $12.2 million last year, up 85 percent from 2008. The company expects to grow by an additional 30 percent this year.

The language service market is a $23.3 billion industry, but machine translation is only a small portion of that. Language Weaver has just surpassed its biggest competitor, Systran in Paris, which last year reported 8.6 million euros in annual revenue, or about $11 million.

Still, it has to compete with free translation services such as Google Translate, which uses technology developed out of the same lab at USC and later sold to Google.

DePalma said customers will find a better quality translation than they would through Google’s free service.

Language Weaver Inc.

HEADQUARTERS: Los Angeles

CHIEF EXECUTIVE: Mark Tapling

FOUNDED: 2002

CORE BUSINESS: Computerized language translations.

EMPLOYEES: 111; 61 in Los Angeles, 50 in Romania (up from 90 total in 2009).

GOAL: To tap into larger markets.

THE NUMBERS: $12.2 million in revenue last year, up 85 percent from 2008.