UPDATED 08:19 EDT / JUNE 10 2013

NEWS

Google’s Buying Waze For $1B To Spite Facebook & Apple

If you haven’t had the pleasure of using the navigation/traffic jam app Waze, you probably will do soon, one way or another. That’s because Google is said to be on the verge of buying the Israeli startup for a massive $1 billion+. The deal would give Google a huge lift in its ongoing struggle for control of the mobile space as it does battle with rivals like Facebook and Apple.

But why is Google ready to spend that kind of money on an app that few have even heard of?

There are three compelling reasons why: firstly, Waze’s underlying technology is built on a collaborative system, with most of its traffic data coming from users in real-time, something that’s quite unlike any other mapping service around. Secondly, Waze is gaining popularity quickly enough that it could one day even threaten Google Maps itself. And third, Google simply doesn’t want Apple or Facebook to get their hands on the technology.

The thing about Waze is that it’s so much more than just a digital map. Unlike Google Maps or Apple Maps, which just provide really accurate, well, maps, Waze offers a social element as well. Its users are encouraged to make regular reports of traffic conditions wherever they are, sharing information on traffic jams, accidents and road closures that could cause delays. The result is that Waze can use this information to help drivers find alternative routes, this outsmarting the traffic and getting from A to B in the fastest time possible.

It’s this social aspect of Waze that threatens Google, and why many believe that its interest in Waze is largely defensive. Rather than attempt to fight Waze by developing something similar and integrating that with Google Maps, the simplest solution is to just buy it and absorb its technology into its own services. We’ve seen big tech companies do this in the past, for example when Facebook did something similar when it bought Instagram (though it left the photo-sharing service as a separate entity) after it emerged as a genuine rival.

By buying Waze, Google would also be denying Apple and Facebook, both of which are said to have been considering their own acquisitions in recent weeks. Facebook apparently came very close to agreeing a deal with Waze, only for talks to collapse when the social media giant insisted that it move its research and development operations to the US – something that Waze’s co-founders were dead against doing.

As for what Google would do with Waze if it does get its hands on it, that remains unclear. Waze is already extremely popular and so Google could well leave it alone as a standalone app, incorporating some of its best features into Google Maps. Alternatively it could shut the service down completely and move everything into Google Maps, though that might prove unpopular with some of its users.


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