Blog Post

Losing its way: Why Google would be stupid to let Facebook acquire Waze

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

According to a number of reports in the Israeli media, Facebook (s fb) 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 (s aapl) 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 (s goog).

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

21 Responses to “Losing its way: Why Google would be stupid to let Facebook acquire Waze”

  1. macertx

    Search for the word “Geofeedia” on this website shows no results as of this posting.
    Any thoughts about this company please , maybe an article …?

  2. Lost my Waze

    This guy is clueless. Google can replicate everything Waze has and do it better for a lot less that $1B. They have one thing Waze doesn’t: a huge user base.

  3. Osho Sukhmani

    This is slightly unrelated but it does have something on about FB. FB is actually acting in ways the Communist countries used to act in older days. FB is going around asking people to veriify their account by phone (in case you ever loose access, it says lies) and then it locks people out on that very basis. I had my sister do the verification for me when I did not have a phone, and then she lost access to her own FB which said she is a fake user or something like it. After that when she tried to access her own FB friends from her own mobile using smses writing complains agout FBs behaviour of locking her out her FB without letting her use the close friends feature, the password reset, the notifications that arrive in email and so forth, she could NOT send that sms till the time the word Facebook was fully in it. She was able to send the smses only after changing the word Facebook to FB. It now becomes clear why FB collects n displays from android phones all other phone book people’s numbers and birthdays. It is to spy or and discourage and untimately enslave them, even thousands of people are locked out of FB in the US and forced to give their government issued ID in order to return back. What information google and gmail shares with FB I dont know but increasingly this is like the scary robot controlled world where the robots control human activities and make them heel. If FB does acquire this company Waze which I have never heard of till today, human beings will be in far more trouble. FB has gone to the extent of not letting mutual friends of my sister unable to send any SOS messages to other friends about my sisters FB lockout. It prevented the sending of sms intelligently enough since the word Facebook was in it and it was complaining against FB and it has gone to the extent of threatening two of her mutual friends on FB including me, get warnings saying its highly suspicious (that one sister send a message for another sister) to be sending mutual friends chat messages mentioning that her own sister is locked out of FB and not to panic…. I mean this is the equivalent of the electronic totalitarian state. So much for convenience and freedom, the way FB is irresponsibly behaving. We need to warn google in time about all that is happening and how FB is directly undermining google through google’s own slackness and compliance. In fact all companies like Waze should not sell to FB with its shady ethics, and its complete crass non-existent customer care or support and shameless shady tactics of demanding government IDs. Banks and governments can do this but not FB after all. I am surprised that there is no news coverage nor has a single American sued FB for such behaviours.

  4. Paul I’m with you on this. In which case maybe someone like Ford should make a play for Waze. Hand’s free route guidance and traffic alerts within your car’s AV system are surely safer than interrogating a mobile app. Unless an auto manufacturer can collaborate to sync the mobile app with the in car system. Maybe they do already?

  5. Richard Fieldhouse

    Your argument holds water in an environment where you accept that a monopoly is good. Google’s motivation for buying Waze, as you present it, is essentially an anti-competitive one – purely to prevent it falling into the hands of a powerful competitor.

    Personally, I like Waze and find it’s predictions can often be very accurate. Really, I would prefer it to remain independent.

  6. Pete Tenereillo

    I totally agree with you Matthew. Google Maps is pre-installed on what, 1 billion phones? And the active Google Maps usage is absolutely insane. I just got back from MotoGP in Austin TX, 131,000 visitors, perfect scenario as people were driving back and forth between downtown and the track, lots of possible routes, and most people needed directions. Seemed like 1/2 of that 131,000 were using Google and contributing to traffic. Every single road was covered in green, yellow, and red lines in Google Maps. It gave me at least 3 choices for routes, and very unexpected ones. Flawlessly correct on traffic. Not a single road had traffic data in Waze. Not even close to enough people using it.

    But Google seems to have no intention of doing something like Waze. I used to worry about that before I sold my former company, Trapster. If Google added speed traps as a layer in Google Maps, game over.

    So Google could add “Waze” functionality to their Maps app in a week. But apparently they won’t. Waze measly 47MM downloads is about how many new activations Google Maps gets every month, so that’s no reason to buy them. And Google already has a map. So Google would gain nothing by buying Waze.

    The issue is what they have to lose by not buying them. Tactically Google should buy Waze and shut it down. That would be sad, but Facebook might just eat Google’s lunch with this one…

    If Facebook starts promoting Waze, or better yet integrates passive traffic and active incident reporting to the Facebook app – game over.

  7. paul martin

    Never used Waze in the UK but worry that you are promoting a system that encourages folk to use a computer when driving. Passive systems like the GPS one you refer to and overhead gantry ones as in Traffic Master seem safer

  8. Would that be a strategic or tactical acquisition for Google or FB. Tactical for Google, strategic for FB. Who spends 1b on tactical, the data/tech Google would have access to is minuscule. Spring clean here we come. One off usage is not a good strategic acquisition.

  9. paragona

    I use Waze everyday on my commute from Santa Cruz up the peninsula near 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. Jonathan Campbell

    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.

  11. Prasad Tiruvalluri

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

  12. FunJonClt

    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.

  13. 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!

    • David Carasso

      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.

  14. 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.

  15. samonderous

    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.

  16. Marinperez

    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.

  17. Frank A NYC

    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.