11:30 am, June 11 2013
After all the to-ing and fro-ing in this story, the original rumor has proved true: Google really has acquired Waze in a deal that's said to have cost over $1 billion. The clincher is thought to be that Google, which has a large office in Israel, will allow the Waze team to remain at their home base whereas Facebook was pushing for Waze to relocate to Facebook HQ in the U.S.
In its blog post announcing the news, Google notes the team will stay at home and operate separately, "for now." Google says it's "excited about the prospect of enhancing Google Maps with some of the traffic update features provided by Waze" and also about boosting Waze with Google's search powers.
Israel-based, economic-focused publication Calcalist is reporting (in Hebrew—Times Of Israel has an English summary) that Facebook is close to offering up to a billion dollars for navigation outfit Waze, one of Fast Company's Most Innovative Companies in Social Media, 2012.
Waze is an Israel-based company that produces a navigation app unlike many of its peers: The app has a large social element that allows users to adjust and improve the accuracy of maps of their area, and report traffic events like congestion or a police stop. As CNET puts it, Waze is "a socially informed GPS app for drivers."
TechCrunch has looked into the rumors and says both sides privately confirm they've been in discussions. The issue remaining is price, and whether to leave Waze in its current location.
The acquisition of a mobile navigation tool makes sense for Facebook at a time when the social network continues to aggressively court mobile users. Here, a few other reasons Facebook might want Waze in its wheelhouse:
In some ways, it's more powerful than Google Maps. Waze allows users to essentially turn off any road that’s closed in real life. So if a road is under construction, flooded, or has a five-car pileup, Waze users will have the power to close it, changing the maps in real time to reflect reality.
Waze proved its crowd-powered mettle in the aftermath of Hurricane Sandy. The White House challenged Waze to make it possible to notify users when gas stations were open and available (gas was often difficult to come by in Sandy's aftermath). Waze quickly figured out a way for users to report and share gas station conditions—information that was shared with Google’s Crisis Maps.
Waze helped Angelinos through "Carmageddon." During the two-day stretch when Los Angeles's 405 freeway shut down for construction, affecting 500,000 drivers, local TV turned to Waze, which asks users to input real-time road reports (and in this case alternate route suggestions) in exchange for credit in the Waze community. Since then, a bunch of other TV stations have partnered with Waze for this service. It's not hard to imagine Facebook wanting to be a vital part of your daily commute—like, say, Google Now might be.
It's pretty, and Facebook loves a pretty picture.
Waze recently visualized the traffic of Rome, Paris, and Tel Aviv.
In these videos, each lit-up line represents a car trip. The lines burst with purple when there is traffic, and other colored bars rise when various alerts are activated, like for police or hazards. In Paris, you can see the main ring road around the center city is in constant use, while one corridor through the city also becomes quite congested, especially at rush hour:
Rome is configured much like Paris, though with much worse traffic, it appears. People also drive into the center of the city more often. Congestion there appears much worse than in Paris, with several major thoroughfares shooting off purple sparks during rush hours.
Tel Aviv, unlike the European cities, doesn't have a central city encircled by major roads, but the highway that runs through the city is heavily trafficked, as are some of its offshoots. Tel Aviv may also just have more Waze users: Its grid is much more clear in the video than the larger European cities.
While both Facebook and Waze have declined to comment on speculation about a deal, there is a history of tech giants—Apple, Google, Facebook, not to mention governments around the world—scoping out the service. Here's how two of the biggest tech giants might have helped make Waze a hot property.
In the aftermath of Hurricane Sandy, it was Waze's crowdsourcing power that helped Google's crisis team create a map of gas stations that still had supplies. (It's not the first time Waze proved it could show Google a thing or two about maps—and Google realizes this; see below about Google's new maps.) Waze VP Community and Operations Fej Shmuelevitz told the Israel Diplomatic Network then:
We uploaded the live gas stations that had fuel, so Wazers could see them and write inside the system about the queues and the supply of gas. We transferred that information to the live Google Crisis Map set up with the government, where people could post about which stations had gas and electricity.
First there was the Apple maps disaster of 2012, during which Waze (launched in 2009) emerged as a potent alternative. Waze CEO Noam Bardin once told Wall Street Cheat Sheet that Apple "showed us how to fail." The old quote rang particularly true during the maps fiasco.
And in case Apple's failure wasn't enough to make Waze look better by comparison, Apple reportedly offered to buy Waze for $400-500 million in early 2013. Some are beginning to speculate that a bidding war could open up, should Apple decide to counter Facebook's supposed billion-dollar offer.
At its I/O developer conference, Google revealed its overhauled mapping product. Maps, it seems, is now leveraging more of Google's smarts in areas such as social media and advanced search in a way that may remind you of Waze.
For example, Google's VP of Maps, Brian McClendon, demonstrated that Maps now has a dynamic rerouting feature that's supposed to offer users better alternative routes more swiftly. This sort of timely data is very much in Waze's wheelhouse, thanks to the way the app leverages crowdsourced real-time data about traffic holdups and other local traffic events like police speed traps.
Does this move by Google somehow devalue Waze, even as its discussions with Facebook are thought to be stalled? Not necessarily. What Google is doing is underlining that social features and crowdsourced data are going to be critical in next-gen mapping services. And that may add some fuel to the Facebook-Waze fire. If Facebook does acquire Waze, its social networking systems, which are increasingly being accessed by users on the move via smartphones, could be ideal for generating real-time traffic and routing data in ways that Google is aiming for.
And if Facebook can't buy Waze because, as the rumors suggest, Waze doesn't want to move from Israel...then Google's move may make Waze even more interesting to another big tech name that's seemingly expanding its Israel-based operations.
Bloomberg is now reporting that search engine giant is said to be interested in acquiring the Palo Alto firm. Waze, which is seeking offers of above $1 billion, would be a handy add-on for Mountain View, as it would add both a social aspect to Google Maps, as well as allowing things like real-time traffic updates.
Google's arrival into Waze's buyout lounge could spark a bidding war between the two Internet behemoths—one has map dominance, the other stands over the social arena like an all-blue Optimus Prime—although all of this interest doesn't necessarily mean that Waze is going to end up in new hands. Other parties are reportedly interested, and the firm also has the option of going down the VC route, and circumnavigating a takeover altogether.
Waze has updated its partly crowd-powered navigation app for iOS and Android devices and incorporated Facebook integration. Simultaneously, rumors suggest that its talks with Facebook over an acquisition have fallen apart.
The new Waze 3.7 edition shows your Facebook events on the navigation list so you can easily make your way to parties and so on. It also includes data on your friends' journeys and shows their progress toward the same destination as yours. You can also "beep" them in real time. There are also a number of other improvements and extra settings.
AllThingsD reports the talks between Facebook and Waze have collapsed, partially because Waze is reluctant to move its operations from Israel to the U.S.
Israeli business site Globes is reporting that Waze is now Google-bound, at a price of around $1.3 billion. The firm's Israeli employees will stay in Israel—Google has a base in the country, and has bought two other Israeli firms, LabPixies and Quiksee. Neither firm was willing to comment on the deal, which will make some of its founders very rich indeed. AllThingsD says the deal will be announced Tuesday.