What is "automatic translation"?

It's translation produced by state-of-the-art technology, without the intervention of human translators. Automatic translation is also often referred to as machine translation.

Has Google developed its own translation software?

Yes. Google's research group has developed its own statistical translation system for the language pairs now available on Google Translate.

What is statistical machine translation?

Most state-of-the-art, commercial machine-translation systems in use today have been developed using a rule-based approach, and require a lot of work to define vocabularies and grammars.

Our system takes a different approach: we feed the computer billions of words of text, both monolingual text in the target language, and aligned text consisting of examples of human translations between the languages. We then apply statistical learning techniques to build a translation model. We've achieved very good results in research evaluations.