The purchase may be announced as soon as tomorrow, said the people, who asked to be anonymous because the talks are private. Closely held Tellme’s 320 employees, including Chief Executive Officer Mike McCue, will join Microsoft, the people said.

Microsoft sees Internet search on mobile phones as an area where it can edge out Google Inc., which dominates search on computers. Redmond, Washington-based Microsoft, the world’s largest software maker, is adding Internet-calling features to its Office programs to help automate customer support.

“Mobile-phone search is a way for Microsoft to tap into a new market where it’s not all over — it’s not just people defaulting to using Google,” said Danny Sullivan, who tracks the search industry and writes a blog called Search Engine Land.

The acquisition would be the largest for Microsoft since the 2002 purchase of software maker Navision A/S for US$1.45 billion.

Bill Cox, a Microsoft spokesman, and Tellme spokeswoman Marci Pedrazzi declined to comment. Microsoft CEO Steve Ballmer pushed for the acquisition because he wants to lead in mobile-phone search, said one of the people close to the deal.

Tellme, based in Mountain View, California, handles toll-free customer-support hot lines for such companies as Merrill Lynch & Co., FedEx Corp. and American Airlines.

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