Google Inc (NASDAQ:GOOG) announced today that it has finalized a deal to acquire Waze, the fast-growing, Israel-based mapping services company. While financial terms were not revealed today, those close to the deal suggest that the deal was inked with $1 billion in cash with the inclusion of up to $300 million in Google stock. Published reports are saying the deal is somewhere between $1.1 and $1.3 billion.


Of the hundreds of acquisitions that Google Inc (NASDAQ:GOOG) has made over the years, if the terms are correct, the pick-up will be Google’s fourth largest surpassed only by Motorola Mobility Holdings Inc (NYSE:MMI) last year, DoubleClick in 2008, and YouTube in 2006.

For those unfamiliar with Waze, it mixes elements of a social network into its maps to produce more precise directions and more reliable information about local traffic conditions. The fast-growing company boasts 50 million drivers using the service in 190 countries. The five year old company has around 100 employees and becomes the latest start up to be purchased for over a billion dollars this year following Yahoo’s purchase of Tumblr last month.

Google Inc (NASDAQ:GOOG) is the clear leader in navigation services and the purchase of Waze was certainly, in no small part, a way of ensuring that Apple Inc. (NASDAQ:AAPL) and Facebook Inc (NASDAQ:FB), who are looking to steal some of Google’s thunder in this arena, would not be able to use Waze’s unique social aspect of mapping to move further into mapping. With Apple’s largely failed effort with Maps, the acquisition of Waze could have amount to a “do over” for the Cupertino company.

“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, Google’s Vice President of Geo said.

The company will continue to operate independently for the time being in Israel. With this acquisition they also shine a positive light on a country that some refer to as a “start-up nation” whose technology exports now represent a majority of their aggregate exports.

In fact, with its sale today it becomes the third largest Israeli company in dollar terms to be acquired by a foreign company.

Waze CEO Noam Bardin wrote in a company blog post that the deal was in part motivated by Waze’s disinterest in going public. “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,” he said.

With the social nature of Waze, Google will certainly hope that it can add to Google Inc (NASDAQ:GOOG) Plus in its quest to take a bite out of Facebook Inc (NASDAQ:FB)’s hold on social networking.