A few weeks after it was reported that Facebook was at an advanced stage in talks to buy the Israeli navigation and traffic congestion app company Waze Ltd. For a price close to a billion dollars, reports are now emerging that Google has thrown its hat into the ring casing the price to skyrocket even further.
Google already has a widely used mapping app in its stable, so why would it want to buy something that does the same thing? Well, analysts are predicting that the search engine giant may want to adopt some features present in Waze’s app that are missing in its own app, namely the social features. Waze‘s popular navigation app can provide crowdsourced-based updates about congestion, police, traffic cameras, accidents, and road hazards. These features would definitely take Google’s own mapping tool to the next level.
Another reason for Google to want to buy the mapping tool, is that in so doing it virtually eliminates competition.
Facebook on the other hand is trying to transform itself into a much more sophisticated social media site with the ability to take over a user’s online experience. To that end, we’ve seen the social media giant launch a more dynamic search feature, buy photo sharing app instagram, improve its timeline features and most recently, launch the Facebook home that is finding it a bit hard to convince users to like it. So for social media giant, this would be a boost to its campaign to diversify its services..
Waze is fielding expressions of interest from multiple parties that could potentially set a bidding war between the two companies, Facebook and Google.
Waze is seeking more than $1 billion, said one of the people, who asked not to be identified because the talks are private. The Palo Alto, California-based startup might after all remain independent, instead seeking to raise a round of venture capital financing to expand its mapping program, which has more than 40 million users.
Waze’s investors include Redmond, Washington-based Microsoft, people said. Waze raised $30 million in 2011 in a funding round led by Kleiner Perkins Caufield & Byers and Hong Kong billionaire Li Ka-shing’s Horizons Ventures Hong Kong. Earlier investors include Magma Venture Partners and Vertex Venture Capital in Israel and BlueRun Ventures in Silicon Valley.