Has Facebook Given Up on Waze?
Waze had seemed a very likely candidate for acquisition, as Facebook (NASDAQ:FB) has been working hard on its push into the mobile sphere and doesn’t have a map application yet. But, evidently, the acquisition talks didn’t lead where parties had hoped.
The focus of Waze’s app isn’t just maps, but rather a deeply social take on maps. The system the Israel-based company made focuses on user involvement and sharing. As users are driving, they can keep the app on and it will generate traffic condition information. In addition, they can actively add data about traffic jams, weather conditions, accidents, cheaper gas prices, and police speed traps. They also have the ability to share routes with friends, so they know how to follow.
Such a focus on sharing to create maps with real-time conditions and friend information seemed right up the alley of Facebook, which may have been why the 2 companies were in talks in the first place. As Facebook has millions upon millions of users, offering a social map to them might be a great move to gain more strength in mobile, and Waze’s maps would benefit greatly from the influx of extra users adding more information to create fuller, more detailed maps. Waze already has 30 million users, according to Bloomberg.
For some months, Facebook and Waze had been in negotiations about an acquisition. The price-tag was inching up and could have reached as high as $1 billion. However, there is a major difference between the companies: a significantly long stretch of the world. As Facebook is based in Menlo Park, California, and Waze is based in Israel, there’s substantial distance between the companies.
If Facebook could stay in California and Waze in Israel, then the deal might have been able to go through, but according to sources for AllThingsD, that wasn’t the way things would go. Facebook apparently wanted the Waze team to come over to Menlo Park and fold into the company, but the Waze team may have been resistive. This is one reason the acquisition talks may have fizzled out.
However, Facebook wasn’t the only one in talks with Waze about an acquisition. Rumors had spread that Apple (NASDAQ:AAPL) might be looking at the company because of its own struggling maps application, but Chief Executive Officer Tim Cook denied such claims. On the other hand, Google (NASDAQ:GOOG) could still be in the running, and now it wouldn’t have Facebook as a major competitor.
Google’s own maps are widely popular, and because of the success of Android, they are greatly used on smartphones. Acquiring Waze would give Google a chance to add extra improvements to its maps through Waze’s social arm. However, an acquisition could be seen as anti-competitive and may not be permitted by regulators.
It’s possible with Facebook out of the way, more companies will take a look at Waze.
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