Shares of software maker Nuance are on a tear. Investors have driven the price of stock in the Burlington [Mass.]-based company up 68 percent in the past year, partly on speculation that it might be taken over. Nuance's voice-recognition technology, which translates spoken words into digital information, would be attractive to several companies.

Nuance wouldn't come cheap, and integrating its various divisions might prove too tall an order for would-be acquirers, says Richard Davis, an analyst at Needham & Co. in Boston. "What investors need to understand is that Nuance doesn't have some single kernel of software code that scales up from a device as small as a Blackberry to a huge server," he says. "They're all totally different products that just happen to have some similarities."

A buyer would also have to win over Nuance's largest investor, private equity fund Warburg Pincus, which holds about a 20 percent stake.

Best known for its Dragon dictation software that runs on personal computers, Nuance has recently made a push into smart phones such as Apple's iPhone with voice-activated search and messaging applications. Nuance also makes voice applications that are used in industries as diverse as health care, call centers, and automotive entertainment.

Health Care: In 2009, 44 Percent of Sales

Nuance shares surged 7.6 percent on the Nasdaq Stock Market on Mar. 5 amid talk that Google or Microsoft might make a bid. Representatives of both companies declined to comment on the speculation. On Mar. 19, Nuance shares rose 3 percent, to 17.08.

While Google is interested in voice-recognition technology, it may not be keen on Nuance's health-care operations, Davis says. Along with dictation operations, health care accounted for more than $418 million, or about 44 percent of Nuance's sales in 2009. The division includes Dragon Medical, a desktop product aimed at doctors, and eScription,...