Provided the deal survives regulatory scrutiny, the purchase is headed toward becoming one of Google’s most important acquisitions. Ever.
From a competitive standpoint, acquiring Waze takes the only desirable mapping service off the market. And Google got it before Facebook did. In early May, Facebook appeared to be in serious negotiations to buy Waze, but no go.
That’s Facebook’s loss. The social aspect of Waze made it a perfect fit for Facebook to jump start any mapping ambitions. That deal reportedly fell apart over whether the Waze team would relocate its headquarters from Israel to Facebook’s offices in Silicon Valley.
Image credit: Waze screencap by Gina Smith
Beyond keeping it out of the hands of Facebook, the real value of Google’s purchase of Waze is that it now has the anti-Google Maps of mapping tech. With its gargantuan fleet of cars, satellite imagery and algorithms, Google throws massive computing power at the challenge of updating maps. But Waze, which relies on users to maintain and update its maps and traffic info, provides better real-time info than what Google provides.
Google’s otherwise excellent mapping service sorely lacked such valuable social data.
Given that the future of mobile search income is dependent on location services, this acquisition is a smart move.
In announcing the acquisition, both companies mentioned that Waze will remain in Israel and operate independently. Such a hands-off approach will serve Google well. By letting Waze do their thing and keeping its community of users happy, Google will have a valuable, real-time source of traffic information that will be nearly impossible to beat.