Facebook said ready to drop $1 billion on Waze

Facebook is reportedly in advanced talks to buy Israeli crowdsourced traffic and navigation app Waze. The price is said to be between $800 million and a billion dollars.

Just a few months ago, rumors abounded that Apple had offered $400 million to buy out the app. That deal reportedly fell through because, among other reasons, Waze felt it was worth more.

Waze, consistently one of the top downloads at Apple’s App Store and Google Play, the store for Android phones, is a navigation and mapping app that offers turn-by-turn directions to drivers who punch in a destination, and updates local and highway maps based on user input. It also recommends alternative routes to drivers to help them avoid traffic.

Waze claims that its mapping system is more accurate than any of the commercial GPS systems available because the maps are constantly updated by drivers who report on road closures and openings, construction, new roads, alternative routes, and so on. Waze’s strength as a mapping program was evidenced last year when Apple CEO Tim Cook recommended Waze as an alternative to Apple Maps, which many users complained was inaccurate.

According to a report in the Hebrew business daily Calcalist, Facebook would pay half the sum in cash and the rest in company stock. The financial aspects of the deal have more or less been worked out, the paper said, with the two companies differing only on whether or not Waze’s research and development would remain in Israel, as company head Uri Levine is said to prefer. The company’s sales group would be integrated into Facebook’s corporate organization. The issue is expected to be worked out, and Facebook is currently doing due diligence on the deal.

However, sources close to Waze said that the deal was not necessarily imminent. The two companies have yet to sign a memorandum of understanding, and banks have not been contacted regarding financing of the deal. The sources drew attention to the fact that this isn’t the first time rumors regarding Waze’s possible sale are circulating.

If Facebook buys Waze, it would be its third acquisition in Israel. The social network bought mobile application platform Snaptu in 2011 for $70 million, and face recognition firm Face.com in 2012 for $60 million.