Google Inc (NASDAQ:GOOG) is tipped to buy crowd-sourced navigation application Waze, according to Israel’s financial newspaper Globes, applying a roadblock to Facebook Inc (NASDAQ:FB) and Apple Inc. (NASDAQ: AAPL)’s efforts to acquire the company.
Google Acquiring Waze For $1.3B:
According to the financial newspaper’s website, Google Inc (NASDAQ:GOOG) is reportedly set to acquire the Israeli traffic and navigation company for $1.3 billion. This would translate into one of the largest acquisitions from Google Inc (NASDAQ:GOOG) in recent memory.
As reported earlier, talks between the social networking company Facebook Inc (NASDAQ:FB) and the navigation startup company dissolved in recent days, due in part to a conflict overwhether the Waze team should move to the United States. The acquisition was expected to provide a potential revenue stream to Facebook Inc (NASDAQ:FB)’s mobile initiatives.
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Another news site Haaretz reported that Google Inc (NASDAQ:GOOG) is set to acquire the much sought-after Waze for an amount exceeding $1 billion in cash.
Mapping services are among the five most-used applications on smartphones and are crucial to engaging and retaining mobile users. The key advantage of owning, rather than licensing a mapping service, is that it allows the product to be personalized for users.
Israel-based Waze was founded in 2007 and has 47-million members. It has a mapping application for smartphones that alerts users to potential traffic slowdowns or suggests alternative routes to reach destinations. Users can also tap an icon to alert other users of road work, speed traps, and other potential hazards. Waze has only 11 of its 100 employees based in the U.S. while the rest are based in Israel.
Waze adopted a ground-up approach to build its social application, a concept espoused by Facebook Inc (NASDAQ:FB). This concept would have aligned well with Facebook Inc (NASDAQ:FB)’s vision of a social service.
Last year, Apple Inc. (NASDAQ:AAPL) tried to release its version of mobile apps to compete with Google Maps, but ultimately failed.
Earlier this year, Apple Inc. (NASDAQ:AAPL) was reportedly in talks with Waze to purchase the company for $500 million. It was the kind of deal that would be ideal for a company that wants to incorporate their own mapping application on their smartphone and tablet.