The history of machine translation generally starts in the 1950s, although work can be found from earlier periods. The Georgetown experiment in 1954 involved fully automatic translation of more than sixty Russian sentences into English. The experiment was a great success and ushered in an era of significant funding for machine translation research in the United States. The authors claimed that within three or five years, machine translation would be a solved problem. In the Soviet Union, similar experiments were performed shortly after.
However, the real progress was much slower, and after the ALPAC report in 1966, which found that the ten years of research had failed to fulfill the expectations, and funding was dramatically reduced. Starting in the late 1980s, as computational power increased and became less expensive, more interest began to be shown in statistical models for machine translation.
Today there is still no system that provides the holy grail of "fully automatic high quality translation of unrestricted text" (FAHQUT). However, there are many programs now available that are capable of providing useful output within strict constraints; several of them are available online, such as Google Translate and the SYSTRAN system which powers AltaVista's (Yahoo's since May 9, 2008) BabelFish.
Read more about History Of Machine Translation: The Beginning, The Early Years, The 1960s, The ALPAC Report and The Seventies, The 1980s and Early 1990s, Recent Research
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