Why Would Google Buy Waze For Over $1 Billion?

Google came on top of the bidding war for the crowdsourced navigation application Waze and ended up winning that bid, paying over $1 billion for the startup. Do you use Waze? Do you think anything will change?

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12 June: Google buys Waze

Google Inc bought Israeli mapping startup Waze on Tuesday for just over $1 billion, a source familiar with the matter said, acquiring an online real-time mapping service to safeguard its lead in one of the most crucial aspects of smartphone usage.

"Why would Google buy Waze? 1st, Waze’s collaborative, user-based approach to mapping represents a real breakthrough for mobile-navigation apps. 2nd, the company poses a threat to Google’s own Maps product. 3rd, Google is able to keep it out of the clutches of archrivals Apple & FB."

"1.03 Billion may seem like a premium for a company with just 28 million users, but the deal is largely a defensive play as Google moves to preserve its dominance in mobile mapping."

Google sets sights on transit and navigation company Waze

According to the Globes, an Israel-based publication, Google is reportedly set to acquire the Israeli transit and navigation company Waze for $1.3 billion, making it one of the larger Google acquisitions in recent memory.

A deal for the free social-powered navigation app for iPhone has been in the works for a few months, with the bidding for Waze reportedly involving Facebook and Google.

Will Waze be better, worse or the same if Google does acquire it?

According to the report, the conditions of the deal will keep Waze CEO Noam Bardin at the helm of the company, and Waze will retain its brand and won't be integrated into Google.

The deal hasn't been finalized yet, but Google agreed not to lay off Waze workers at its development center in Israel, and will allow the company to continue its development in Israel "for at least three years."

Here's what tech experts say:

"By buying Waze, Google keeps competitors like Apple and others away from the easy out, which would be an acquisition of a company with already-working and reliable technology. With this deal, Google effectively blocks Apple and Facebook from even having a chance."

"However, it’s likely not going to be as easy as writing a check. There are not many global sources of mapping data: just Waze, Google, Navteq, TomTom and OpenStreetMap. Thus, this would be a deal that attracts serious regulatory scrutiny."

"Google has been among the most acquisitive Web companies, and its track record has been stellar compared with that of its peers, according to many mergers-and-acquisitions professionals."

Isn't Apple interested in buying Waze?

"There were rumours that Apple was interested in Waze, which made perfect sense at the time considering Apple was building and releasing a buggy, inadequate Maps app but those rumours died down."

What is Waze?

A screenshot of the application Waze.

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Waze was founded in Israel and has around 100 employees, including a large research-and-development team in that country. Its chief executive and other top executives are based in Palo Alto, Calif., and the company also has some employees in New York.

A screenshot of the application Waze.

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The company was founded in 2007, and has since raised a total of $67 million from investors like KPCB, Horizon Ventures, Blue Run Ventures, Magma Venture Partners, and Vertex Venture Capital.

Waze, a free app available on Apple devices and those powered by Google's Android mobile operating system, promises to help the roughly 45 million drivers who use it to "outsmart traffic and get everyone the best route to work and back, every day."

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