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Sunday, June 9, 2013

Google reportedly acquiring Waze app for $1.3 billion

After “dating” at least three of the biggest tech companies in the world, it appeared Sunday night that Waze was finally getting the “ring” — one worth $1.3 billion, according to a report in the Israeli business newspaper Globes.

That’s the sum Google has reportedly agreed to pay for Waze, the Ra’anana-based crowdsourced driving and navigation app with 50 million users around the world. The figure is $300 million higher than Facebook reportedly offered to pay for the firm earlier this year.

A company source contacted by The Times of Israel had no comment on whether or not talks with Google (or any other party) were on or off. “We don’t comment on rumors and speculation in general,” the source said.

The purchase, reported by Globes citing an anonymous source, would be the biggest buyout yet for an Israeli consumer firm, far outstripping’s $60-million sale to Facebook last year.

In May, it was rumored that Facebook had offered nearly $1 billion for Waze, but negotiations broke down several weeks later, apparently over Facebook’s insistence that Waze move its R&D from Israel to one of Facebook’s existing facilities, in the US or Britain. 

Several weeks later, it was reported that Google was interested in Waze, and that the search giant had offered as much as $1 billion for the company as well.

Previous rumors — earlier this year — had Apple as a prospective Waze buyer, with an offer of $400 million for the Israeli company.

A Google-Waze deal would likely not get snagged over location; Google already has several large R&D facilities in Israel, and employs hundreds of engineers here. Integrating the already existing Waze group into the Google infrastructure would be much simpler than getting Waze integrated with Facebook, local social media expert Yotam Tavor told The Times of Israel.

However, it appears that location wasn’t the only issue. As recently as several weeks ago — amid the rumors that Google was poised to make an offer for Waze — company insiders were quoted in news reports as saying that members of the Waze board of directors believed that they would be selling themselves short if they “settled” for $1 billion — and that they could raise much more with an IPO. 

How much Waze would fetch in an IPO isn’t clear, but if the latest report is true, Google apparently agrees with the Waze officials opposed to a sale.

Google already has its own mapping and driving app, and competes with Waze, but the latter dominates in most of the markets where Google’s Navigator app is used. As such, Google and Waze are competing in the same space, but most users agree that the Waze app is much more elegant and user-friendly than the Google one.

In addition, Waze has built an active and loyal social network, which is highly engaged with the app, as well as a built-in mobile ad platform. In its latest version, it supplies Google Maps-like recommendations — making it a perfect match for Google, Tavor said.

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