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Summary:

News reports out of Israel say Facebook is in talks to acquire traffic-information service Waze for as much as $1 billion, but Google will be making a big mistake if it doesn’t try to top that offer.

According to a number of reports in the Israeli media, Facebook is in advanced talks with Waze — a mobile mapping and traffic-information service based in Israel — about acquiring the company for as much as $1 billion. This is not the first time Waze has been the subject of acquisition rumors: Apple was reported to be in talks with the company in January, although that report was later debunked. But while Apple could definitely benefit from buying Waze, the one who needs it most is Google.

For those who may not have used it, Waze — which won our Launchpad event at Mobilize in 2009 — provides real-time information about everything from road closures and accidents to traffic backups and police speed-traps. The information is superimposed on a scrollable map, and there are also a number of social features built in, which allow users to see and share information, including messages, with other drivers. Waze even provides gas-price data.

waze-screenshot

Facebook wants to acquire mobile users

If Facebook does acquire Waze for $1 billion, as reported by Israeli media outlets like Calcalist and Ynet, it would be one of the biggest acquisitions the social network has ever made, rivalling the purchase of mobile photo-sharing service Instagram (which signed a deal for $1 billion but actually wound up being acquired for $750 million due to a drop in Facebook’s share price). And the rationale for the deal would be much the same as it was for Instagram — namely, acquiring and holding onto mobile users.

As my colleague Erica Ogg explained when the Apple rumors were floated earlier this year, Apple would also make a good fit for Waze, in part because the company’s mapping app is seen by many as an also-ran to Google’s more feature-rich service — which is why there was such an outcry last year when Apple suddenly cut off Google and switched iOS users to its own maps.

But while Apple would be a good fit, and Facebook has its own reasons for wanting a service like Waze, I think Google would be the real loser if it went to either of these companies, for the simple reason that Google Maps is a big part of the company’s mobile appeal — at least for me, and I would suspect for many others. My reliance on Google Maps was one of the reasons why Apple’s move irritated me and helped push me towards the Android platform, and Waze is good enough that it could help either Apple or Facebook leap-frog Google.

Waze-NewYork

Google has the most to lose

I’ll admit that I was somewhat skeptical about the value of Waze until I tried using it on a long drive from Florida to Toronto earlier this year. I had looked at the service a few times, but it didn’t have a lot of data or users in Canada (it now has about 45 million users worldwide) and I didn’t see the appeal of the social elements. But when I started using it during this long drive, its utility quickly became obvious — and I stopped using Google Maps altogether.

I’m not yet sold on the ability to connect with other users through the app (unless they are friends already, which would make sense if you were on a trip together), but being able to see at a glance where there is a traffic jam — and even what speed people are going who are stuck in it — and where there’s a speed trap or a police car on the roadside was hugely useful. The gas price data also came in handy more than once.

Google Maps also has traffic data, and it is also based on real-time information, which comes from other users of the service who have their GPS location turned on. It is pretty accurate — but I don’t find it nearly as useful as Waze. I didn’t think enough people would take the time to enter information about things like traffic or speed traps into Waze to make it useful, but I was wrong. And Google doesn’t seem to have any plans to try and duplicate that, since it is more focused on automating that whole process, in typical Google fashion.

There’s no sign that Google has shown an interest in acquiring Waze, but I think the company would be stupid not to at least consider trumping Facebook’s offer. It could wind up losing its way, and a bunch of mobile users to boot.

Post and thumbnail photos courtesy of Flickr user Dunechaser and Waze

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  1. Frank A NYC Thursday, May 9, 2013

    I still think apple should be making a play for waze. Pehaps they will swoop in with an all cash offer at the last minute.

  2. Definitely agree. Facebook calls itself a mobile company, so any time you’re using your phone and it isn’t Facebook, it’s failing. I think this could be a brilliant play to bring Facebook to the commute.

  3. samonderous Thursday, May 9, 2013

    This is crazy talk. I was a Waze user for almost a year. It’s actually pretty bad. Most of the social features are useless by virtue of being in a car and driving and there’s no need for them after you’re done with your drive. The only useful feature is re-routing based on traffic jams. If Google can algorithmically calculate that by learning from traffic data and realtime mobile presence data, I see no need to purchase Waze.

  4. Recently I used Waze to drive from Kansas City to Austin Texas over a holiday. I really felt like Waze was giving me good data until I wanted a long distance projection. There was a lot of traffic between Dallas and Austin (a drive that normally takes 3 hours). Waze projected 4.5 hours and google maps projected 7.5 hours. I thought there was no way google could be correct. I was wrong …. it took 7 hours and 35 minutes. Google does a much better job of calculating long distances. And it is much easier to use. I have since left Waze because it creates distracted drivers by treating traffic reporting as a game and giving you points. Come on folks … driving is not a game … let’s create apps that give us useful information without all the manual implementation and the horseplay.

  5. Duplicating Waze features on google maps is a piece of cake since google already has the infrastructure in place…why would google want to pay a billion dollars when they could easily duplicate the functionality of Waze for a 1/10 of the cost??? And where does Waze get their mapping info from anyway? Wouldn’t be surprised if it was google.

    What is surprising is FB wanting to buy Waze…just goes to prove Zuckerberg is a clueless CEO who doesn’t know what direction to take FB going forward…it’s no wonder FB stock has gone nowhere except south since it’s IPO!

    1. David Carasso Mike Sunday, May 12, 2013

      Waze brilliantly gets its mapping data from users driving! In fact you can pave new roads. i can click “Pave” and drive down an unmapped dirt road and it will get added.

  6. In my opinion Apple for Facebook can have Waze and it still won’t do them any good. Google didn’t get to where it is because it’s primary data sourcing method was a manual process. Sure used can make updates to maps and various other data points, however automation is the way to go. Google uses real-time data sourcing from local police, State Highway Patrol , and the Android phones that everyone carries. As part of the TOS your Android phone can and is being tracked, thereby giving Google an immense amount of automated data. Simply put manual doesn’t scale.

  7. Prasad Tiruvalluri Thursday, May 9, 2013

    Waze is hardly active in India. Facebook is used most in India and Brazil. Not sure what you are trying to prove…

  8. Jonathan Campbell Thursday, May 9, 2013

    This will actually help Google if they act on it. They don’t necessarily have to buy Waze, but if FB buys them, it will force Google into making major improvements to their maps app. However if they refuse to acknowledge the competition, I agree that it will be bad news for Google… and me.

  9. I use Waze everyday on my commute from Santa Cruz up the peninsula near SFO..an hour plus commute. I have used Waze to my advantage on several occasions. The ability to see speedtraps and traffic building up ahead and making an intelligent decision to reroute is crucial. Unlike Google maps you can see graphically clusters of traffic ahead and see how fresh that data is…report of a patrol car, accident, whatever all in one place. Facebook would just screw up this great app by adding apps and other BS. GOOG – please make a preemptive move and integrate this great product!!!

  10. Where is Waze active? Where it has more users and has not bad coverage?

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