News of the Facebook bid emerged earlier this month via reports in the Israeli media, which said that the social network had offered up to $1 billion to acquire Waze, which adds a real-time social element to traffic maps and claims to have close to 50 million active users. More recently, however, the Facebook talks have apparently bogged down over issues involving whether Waze will have transfer most of its staff from Israel to Facebook’s home base in California.

As with many such reports, the Bloomberg news is couched in all sorts of qualified terms, quoting anonymous sources “familiar with the matter” who say the company “may be considering” an offer, and it’s not uncommon for companies to float such rumors when they are looking for more money — or when they want to convince their acquirer to drop certain conditions, such as the requirement that Waze move its operations to San Francisco.

Some Israeli news outlets have also reported that Facebook has locked down its offer with a clause that prevents Waze from negotiating with other companies. And Google may have decided that making a bid for Waze simply isn’t worth the hassle that it might generate from antitrust authorities, who are already said to be looking at the company on other matters.

Google needs Waze more than Facebook does

All that said, however, there are some compelling reasons for Google to make a bid for Waze, as I tried to outline in a recent post. While it would make sense for Facebook to acquire the company — if only because it would help cement the social network’s move into mobile, and broaden the range of behavior and location data it could use to target users — it makes far more sense for Google.

Google Maps is one of the core offerings the company has when it comes to mobile, arguably almost as important as search and email. And it’s clear that Google cares about evolving the service, since it continues to pour resources into redesigns and added features like the ones that Om wrote about recently. There’s also no question that the social data provided by users is a crucial element of maps — and that is what Waze specializes in, and has managed to build right under Google’s nose.

I would argue that Google can’t afford to let Facebook (or Apple, although it reportedly isn’t part of the current negotiations) get its hands on Waze — in much the same way that Facebook CEO Mark Zuckerberg came to the swift conclusion that he couldn’t afford to let Twitter acquire Instagram, and made a surprise $1-billion offer without even consulting his board of directors. If Google hasn’t already made a bid for Waze, I think it needs to get busy working on one.

Post and thumbnail photos courtesy of Flickr user Dunechaser and Eva Blue

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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.

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.

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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Waze, you might recall, is one of the apps Apple CEO Tim Cook recommended last fall that dissatisfied Apple Maps users try until the Apple product improved. But it’s been around for two years, and Waze’s maps are available in 45 countries. The free app has been downloaded 40 million times, the company said Wednesday.

Waze is already used to report speed traps, the cheapest gas stations and accidents that other users can see in real-time and plan their routes around. But road closures is the newest crowdsourced feature and will automatically influence other drivers’ directions. It will work like this: if a road is closed due to snow or ice, if construction pops up, or a street is closed for an event, a user can report it and the app will automatically re-route the user around that road. But if a certain number of people report the same closing, then the app will automatically start re-routing everyone around that road.

That “certain number” isn’t the same for every kind of road. Two people can’t report Highway 101 as shut down and cause the app to re-route, for example. Waze won’t say exactly how many, but it would have to be a lot more than a single-digit number of reports to take effect. By contrast, a rural county road may be routed around and considered officially closed after a much smaller number of closure reports.

Waze will automatically detect when a road is back open too — as soon as someone drives through that point and doesn’t report the closure, the app considers the road re-opened.

Waze says it got a taste of the utility of its real-time crowdsourcing after being asked for help by the White House and FEMA to help in the aftermath of Superstorm Sandy last fall. Waze asked New York area Waze users to mark on the map the gas stations they came across that were open, the length of the lines, and how long the gas was expected to last at that location.

“Sandy gave us confidence,” Waze spokesman Michal Habdank-Kolaczkowski told me. ”We’re not trying to turn Waze into a crisis-solving app, but as a driver you should know what’s happening on the road,” he said, whether that’s snow, a street fair or construction. “There’s a lot of reasons a road can close, not just a crisis.”

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The researchers studied more than 5,000 accident reports as well as nearly 30,000 reports of police presence to determine where the most accidents happen and whether police were often nearby. What they found was that 75 percent of the most-accident-prone areas were intersections, and that there were many instances where police were monitoring safer intersections and weren’t subsequently reported as being at accident sites shortly after they occurred. When police did respond, the average response time was just over 28 minutes.

Satellite image from Google Earth combined with accident and police report heatmap – area units with high accident scores (marked as redand white ellipses) and high police scores (marked as purple circles). Source: IEEE 27th Convention of Electrical and Electronics Engineers

According to the paper, future directions for this research include analyzing the effect of greater police presence on the number accidents and “us[ing] machine learning techniques to understand the causes that make some intersections more dangerous than others.”

These researchers are just one of many groups trying to make sense of traffic data to improve our commuting lives, though. A few that we’ve covered recently are INRIX, which collects real-time traffic data from millions of cars, commercial vehicles and mobile phones; Xerox, which is trying to quell congestion on the streets and freeways of Los Angeles; and Nokia, which is experimenting with a credit-based system for finding and reporting open parking spots.

Feature image courtesy of Shutterstock user isaravut.

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Update: Well, it appears Techcrunch is now disagreeing with itself. Another writer from the site now reports that the deal is “not actually happening.” We’ve also heard that the actual conversation between Apple and Waze has more to do with sharing data, and that Waze has been approached by other companies about acquisition.

Apple’s motivation to make such an acquisition is pretty obvious: the company’s own navigation app, Apple Maps, was not at all ready for prime time when it went live in September. Apple has apologized for the poor directions and incomplete location data, with CEO Tim Cook recently telling an interviewer that the company is fixing the app through software updates, but also vaguely mentioned the company’s “huge plan to make it even better.”

What is that “huge” plan besides periodic software upgrades? An acquisition of a popular mobile mapping app — which has access to millions of crowdsourced location data points from all over the world — could fit the bill. The size of Waze and its price tag also fit in with the type of acquisition Apple likes to do: small, private companies for relatively small (for Apple) costs. To date, Waze has raised $67 million in venture capital; Apple has a little over $120 billion in the bank.

Still, even if Apple is pursuing Waze, it’s not clear its offer of $500 million will cut it: the report indicates that Waze is looking for a deal roughly 50 percent higher than what Apple is offering, about $750 million.

This post was updated at 10:59 a.m. PT.

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The comparison isn’t just for headline purposes. Waze’s founder and CEO Uri Levine is a Moovit board member and has helped shape the company’s people-powered approach.

The iOS and Android app, which just debuted in New York earlier this month along with Chicago, Washington D.C., Boston and Los Angeles, starts by offering static and GPS-powered data from transit systems and then applies an algorithm that tweaks it with statistical data compiled each day. That allows it to offer more accurate estimated times of arrival that adjusts predictions for the time of day. Moovit also alerts people catching multiple trains and buses about upcoming travel conditions and whether they might have just missed their next connection.

That already makes Moovit extremely valuable, said CEO Nir Erez, for both inexperienced transit riders and hardened veterans who just want accurate ETAs or a look at upcoming conditions. But Moovit works to add another layer of data provided by users. When a user catches their bus or train and leaves their app open, their movements get anonymously sent to Moovit’s database, which shares that with other users, who can then track arriving vehicles.

Moovit also pings a user with a question immediately about how crowded their bus or train is, which can be shared to riders further down the route. Users can also share information about accidents, delays, inaccurate information or provide information about the vehicle such as whether it has Wi-Fi or is wheelchair accessible. Erez said 95 percent of people respond to Moovit’s questions and offer feedback into the system.

A crowd-sourced system like Moovit’s obviously relies on a crowd to really make it valuable. Moovit, which debuted in the second quarter in Israel, is now up to 400,000 users worldwide including 40,000 in the U.S. But half of the users are in Israel. Erez said a city like New York needs only about 20,000 to 30,000 users to make its crowdsourced data useful. He said it’s quickly getting to that point, but until then, it can’t quite deliver on its full promise.

Another weakness for Moovit is the inability to go underground. When users jump on subways, they are unable to provide real time data until they arrive at a stop with connectivity. That can limit some of the data that gets sent to upcoming riders. Moovit is working on a system to better understand a user’s movement as they travel underground by measuring their acceleration and grabbing whatever signals it can get as travelers pass through stations.

As someone who travels on a subway regularly, that’s one of the barriers I see to Moovit. That and the fact that I pretty much have only one route to take to get to work. But Erez said that a lot of users actually have choices for their transit routes and everyone can benefit from better ETAs and arrival times. A Moovit analysis found that users are delayed an average of 12 percent over the time they originally expected to spend traveling on a particular trip.

Erez said user retention is growing as people find more usefulness in the app. And that just makes the app more accurate as it processes more user data.

“If you provide a comprehensive and very accurate solution, people will trust you,” Erez. “They will be willing to use your application even if they know what their route is, just to get reports on trips and see if there are problems reported.”

Moovit, which has raised $3.6 million from Gemini Israel Ventures and BRM Group, has also launched internationally in Brazil, Italy, Spain and the Netherlands. It’s gotten a nice bump in attention thanks to Apple Maps, which now recommends Moovit as an alternative for transit information. But it also faces plenty of competition from Google Maps and apps like Embark, The Transit App.

Where Moovit can shine is by making good use of crowdsourced data, something that has made Waze a killer driving app. That’s a differentiator and can help Moovit deliver more accurate information, as long as it can get enough users to buy into the system and share their data.

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Now the company is hoping that’s a recipe for serious revenue as it turns on its first location-based advertising platform called Waze Ads. Retailers and brands can pay to insert themselves into Waze’s maps and search results when their locations are on the route of Waze users. So when a Waze user launches the app to navigate to work, home or some other location, they will be able to see ads and discounts from a gas station, restaurant, coffee shop or store pop up on their navigation map. Waze will not show more than three ads on a map at any given time.

Waze said what makes this different from other location-based ads is that it can understand where people are headed because they set their destination, not just where they are at the moment. That allows it to show ads that are relevant to users and only appear along the route towards a destination.

Waze could track where individuals have visited in the past and target ads based on that, but it wants to be careful about that. So it’s using more general group data to serve up what people might want. For example, it might know that a person visits Starbucks every day, but it doesn’t want to serve that person with only coffee ads because it could be creepy knowing that Waze is tracking your every move. But in the future, Waze is looking at how it can layer in more data from users, including Facebook likes and other user behavior.

The company said 20 percent of users already search and navigate to restaurants while in the app, and 15 percent search for fast-food establishments and 10 percent for coffee shops. Waze surveys have also found that more than half of the service’s users routinely make pit stops along their routes, with 30 percent doing so to shop.

Waze Ads is launching in the U.S. with advertisers such as Dunkin Donuts, Circle K MACS, Kum & Go, Wyndham Hotels, Jamba Juice and Procter & Gamble. Some will offer discounts to users, while others can just advertise their location or ask for users to download an app. Waze is looking at employing payment tools to help confirm when a user spends money as a result of seeing an ad impression. It recently integrated with CardSpring to sync offers to debit and credit cards and will look at rolling that out in the future.

The launch of the mobile ad platform follows a test of ads for gas stations in June.

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Now, with an update to version 3.5, Waze users on iOS  and Android  can sign-in with Facebook and see when friends are navigating to the same place and get their estimated time of arrival. Users can send a pick-up request to another user, allowing the recipient to easily navigate to that location. The sender can also track their ride on a map and see their ETA, even without having the Waze app.

Users can also proactively share their location with others by sending a link, which allows anyone to track their progress without having to use the Waze app. For the privacy conscious, Waze offers users the option to go invisible.

The update to 3.5 also includes redesigned maps, an improved interface and other features, such as the ability to see toll roads while routing, send private messages and save parking locations.

Waze has been on fire lately, thanks in part to the botched roll out of Maps on iOS 6. It now reaches 29 million users, up from 13 million six months ago and 26 million just a month ago. Di-Ann Eisnor, Waze’s VP of platforms and partnerships, told me that the company probably picked up an extra 1 million users thanks to iOS 6 and Apple CEO Tim Cook’s endorsement of Waze a Maps alternative.

She said the latest improvements to Waze are designed to help users be more efficient with the system and assist them in connecting through Waze. That’s how many people already use Waze — to pick each other up and meet with friends and contacts who are out and about.

“This is the most social we’ve ever been and the most we’ve dared to go,” said Eisnor. “We wanted to make sure it’s about the driving experience, not another way to look at Facebook. People are already driving with Waze, this is just going to make it much more social.”

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