SALON

Tuesday, Jun 11, 2013 10:20 PM UTC

Google bolsters mapping service, purchases Waze

The $1.03 billion deal was announced Tuesday

By

Topics: Associated Press, Google, Waze, google maps, Silicon Valley, Facebook, Apple, ,

Google bolsters mapping service, purchases Waze (Credit: Google web search)

SAN FRANCISCO (AP) — Google is buying online mapping service Waze in a $1.03 billion deal that keeps a potentially valuable tool away from its rivals while allowing it to gain technology that could improve the accuracy and usefulness of its own popular navigation system.

The acquisition announced Tuesday ends several months of speculation as Waze flirted with potential buyers interested in its rapidly growing service. Waze blends elements of a social network into its maps to produce more precise directions and more reliable information about local traffic conditions.

Google Inc. is believed to have trumped two of its fiercest foes, Facebook Inc. and Apple Inc., in the bidding for Waze, which is based in Israel but also maintains a Palo Alto, Calif., office near all three of the Silicon Valley giants.

“We evaluated many options and believe Google is the best partner,” Waze CEO Noam Bardin wrote in a Tuesday blog post.

Financial terms of the deal weren’t disclosed, but The Associated Press confirmed the sale price with a person familiar with the negotiations. The person, who spoke on condition of anonymity, was not authorized to discuss the matter. Google isn’t expected to disclose the price until it discusses the transaction in a formal regulatory filing.

Waze ranks as the fourth most expensive acquisition among the more than 240 deals that Google has completed in its nearly 15-year history. The only bigger purchases are Motorola Mobility Holdings for $12.4 billion last year, DoubleClick for $3.2 billion in 2008 and YouTube for $1.76 billion in 2006.

The price underscores the increasing importance of digital maps as people frequently check navigation services on their smartphones and tablet computers to help steer them in the right direction. The reliance on mobile maps creates more opportunities to show money-making ads, particularly those from local merchants. Google can also link the navigation systems to other applications to help generate more revenue.

Forrester Research analyst Julie Ask expects maps to become a main gateway on mobile devices, much like Internet search engines have been on personal computers for the past decade. “A growing percentage of time will be spent discovering, accessing and engaging content within maps,” Ask predicted.

Google is the leader in the field, but both Apple and Facebook would like a bigger piece of the market.

Those ambitions are likely a key reason Google scooped up Waze, said University of Notre Dame management professor Brian Proffitt, who specializes in technology issues. “If Facebook had gotten Waze, they clearly would do something in the mobile market with it,” Proffitt said. “Getting Waze is like a billion-dollar remedy to a potential headache for Google.”

Apple also has been trying to improve the quality of its maps since the debut of its own navigation system last year. The maps, which replaced Google’s technology as the built-in app to get directions on the iPhone and iPad, misplaced landmarks and misguided users, prompting a public apology from Apple CEO Tim Cook, along with vow to get better.

In a blog post, Google said the Waze deal had already closed. The deal didn’t require government approval before it could be completed because of Waze’s relatively small size. Although Waze doesn’t disclose revenue, it only has about 100 employees.

But Waze has been gaining a foothold in the digital mapping market. Waze says nearly 50 million drivers in 190 countries use its mapping app to avoid traffic jams and find the fastest way to their jobs and other destinations. The service figures out the most efficient routes by drawing upon real-time information shared by about 70,000 members who help edit the maps and even provide other helpful tips, such as where to find the best gasoline prices.

In an interview during an April technology conference presented by All Things D, Waze’s Bardin described his service as “the only reasonable competition” to Google in mobile maps.

Even though Google already has assumed ownership of Waze, government regulators could still review the deal to assess its effects on the mapping market.

None of Google’s previous acquisitions have been blocked by regulators, although a few underwent reviews that lasted nine to 12 months.

Most of the previous regulatory inquiries have centered on Google’s dominance in Internet search – a service closely linked to maps – and online advertising.

For now, Google will allow Waze to operate independently and maintain its main offices in Israel. Google, which is based in Mountain View, Calif., is taking the same tack with Motorola Mobility, which operates autonomously in Illinois.

“We’re excited about the prospect of enhancing Google Maps with some of the traffic update features provided by Waze and enhancing Waze with Google’s search capabilities,” Brian McClendon, a Google vice president who oversees maps, wrote in the company’s blog post.

Waze’s sharing tools also could help Google improve its own 2-year-old social networking service, called Plus, as it tries to lure traffic away from Facebook.

In his blog post, Bardin said Waze decided it made more sense to tap into Google’s vast resources instead staying on its own and eventually facing the distractions of an initial public offering.

“Choosing the path of an IPO often shifts attention to bankers, lawyers and the happiness of Wall Street, and we decided we’d rather spend our time with you, the Waze community,” Bardin wrote.

Google’s stock shed $10.41, or about 1 percent, to closed Tuesday at $879.81. That decline was roughly in line with the broader markets.

Waze, which started five years ago, is the latest mobile startup to blossom into a billion-dollar baby. Last month, Yahoo Inc. agreed to buy Tumblr, a blogging service started in 2008, for $1.1 billion.

The acquisition also could help Israel’s efforts to stamp the country as a wellspring of innovation.

Faced with limited natural resources, Israel has excelled in technology and fostered a vibrant high-tech culture. The country is a popular destination for global venture capital funds seeking to capitalize on Israel’s entrepreneurial spirit, as well as expertise honed in universities and advanced technology units of the Israeli army.

Technology is now viewed as Israel’s main economic engine, accounting for roughly half the country’s exports. Israel is even promoting itself as “startup nation.”

The Waze buyout ranks among the largest company sales in Israeli history. Chromatis Networks was sold to Lucent Technologies for $4.5 billion at the height of the dot-com bubble in 2000. Lucent wound up closing Chromatis a year later. Last year, computer networking gear maker Cisco Systems snapped up Israeli video software company NDS Group for $5 billion.

Michael Liedtke

More Michael Liedtke.

You Might Also Like

More Related Stories

Featured Slide Shows

7 motorist-friendly camping sites

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 9

Sponsored Post

  • White River National Forest via Lower Crystal Lake, Colorado
    For those OK with the mainstream, White River Forest welcomes more than 10 million visitors a year, making it the most-visited recreation forest in the nation. But don’t hate it for being beautiful; it’s got substance, too. The forest boasts 8 wilderness areas, 2,500 miles of trail, 1,900 miles of winding service system roads, and 12 ski resorts (should your snow shredders fit the trunk space). If ice isn’t your thing: take the tire-friendly Flat Tops Trail Scenic Byway — 82 miles connecting the towns of Meeker and Yampa, half of which is unpaved for you road rebels.
    fs.usda.gov/whiteriveryou


    Image credit: Getty

  • Chattahoochee-Oconee National Forest via Noontootla Creek, Georgia
    Boasting 10 wildernesses, 430 miles of trail and 1,367 miles of trout-filled stream, this Georgia forest is hailed as a camper’s paradise. Try driving the Ridge and Valley Scenic Byway, which saw Civil War battles fought. If the tall peaks make your engine tremble, opt for the relatively flat Oconee National Forest, which offers smaller hills and an easy trail to the ghost town of Scull Shoals. Scaredy-cats can opt for John’s Mountain Overlook, which leads to twin waterfalls for the sensitive sightseer in you.
    fs.usda.gov/conf


    Image credit: flickr/chattoconeenf

  • Nordhouse Dunes Wilderness Area via Green Road, Michigan
    The only national forest in Lower Michigan, the Huron-Mainstee spans nearly 1 million acres of public land. Outside the requisite lush habitat for fish and wildlife on display, the Nordhouse Dunes Wilderness Area is among the biggest hooks for visitors: offering beach camping with shores pounded by big, cerulean surf. Splash in some rum and you just might think you were in the Caribbean.
    fs.usda.gov/hmnf


    Image credit: umich.edu

  • Canaan Mountain via Backcountry Canaan Loop Road, West Virginia
    A favorite hailed by outdoorsman and author Johnny Molloy as some of the best high-country car camping sites anywhere in the country, you don’t have to go far to get away. Travel 20 miles west of Dolly Sods (among the busiest in the East) to find the Canaan Backcountry (for more quiet and peace). Those willing to leave the car for a bit and foot it would be remiss to neglect day-hiking the White Rim Rocks, Table Rock Overlook, or the rim at Blackwater River Gorge.
    fs.usda.gov/mnf


    Image credit: Getty

  • Mt. Rogers NRA via Hurricane Creek Road, North Carolina
    Most know it as the highest country they’ll see from North Carolina to New Hampshire. What they may not know? Car campers can get the same grand experience for less hassle. Drop the 50-pound backpacks and take the highway to the high country by stopping anywhere on the twisting (hence the name) Hurricane Road for access to a 15-mile loop that boasts the best of the grassy balds. It’s the road less travelled, and the high one, at that.
    fs.usda.gov/gwj


    Image credit: wikipedia.org

  • Long Key State Park via the Overseas Highway, Florida
    Hiking can get old; sometimes you’d rather paddle. For a weekend getaway of the coastal variety and quieter version of the Florida Keys that’s no less luxe, stick your head in the sand (and ocean, if snorkeling’s your thing) at any of Long Key’s 60 sites. Canoes and kayaks are aplenty, as are the hot showers and electric power source amenities. Think of it as the getaway from the typical getaway.
    floridastateparks.org/longkey/default.cfm


    Image credit: floridastateparks.org

  • Grand Canyon National Park via Crazy Jug Point, Arizona
    You didn’t think we’d neglect one of the world’s most famous national parks, did you? Nor would we dare lead you astray with one of the busiest parts of the park. With the Colorado River still within view of this cliff-edge site, Crazy Jug is a carside camper’s refuge from the troops of tourists. Find easy access to the Bill Hall Trail less than a mile from camp, and descend to get a peek at the volcanic Mt. Trumbull. (Fear not: It’s about as active as your typical lazy Sunday in front of the tube, if not more peaceful.)
    fs.usda.gov/kaibab


    Image credit: flickr/Irish Typepad

  • As the go-to (weekend) getaway car for fiscally conscious field trips with friends, the 2013 MINI Convertible is your campground racer of choice, allowing you and up to three of your co-pilots to take in all the beauty of nature high and low. And with a fuel efficiency that won’t leave you in the latter, you won’t have to worry about being left stranded (or awkwardly asking to go halfsies on gas expenses).


    Image credit: miniusa.com

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 9

Related Videos

Comments

 0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

Popular on Reddit

links from salon.com

From Around the Web

Presented by Scribol
listener_new_rect The Listener: "The Joker": Laughing at life's deepest sorrows