Google is newest Waze suitor; let the bidding begin?

Israeli-developed driving app was set to be bought by Facebook, but now there’s competition

A screen capture from a Waze tutorial video (photo credit: Waze/YouTube)
A screen capture from a Waze tutorial video (photo credit: Waze/YouTube)

Slam on the brakes: While last month it appeared Facebook was set to buy Israeli crowdsourced driving and navigation app Waze for nearly a billion dollars, Google is planning its own bid.

According to reports Friday, Google and Waze have conducted secret talks over the past few weeks in California. Facebook’s interest was reportedly one of the impetuses for the talks.

Google already has its own mapping and driving app, and competes with Waze for users. Waze has over 40 million users in dozens of countries, and dominates in most of the markets where Google’s Navigator app is used.

The reports, quoting company insiders, said that it was not at all clear that Waze was for sale at all at this point. With the company clearly worth a lot of money, company directors are also said to be considering an IPO, which they believe would be very successful. Several Israeli analysts said that in order for Waze to compete with Google and Apple, which also has a mapping and driving app, the company will need to either go public, or join a cash-rich company that can help Waze expand services and users.

Unlike Google and Apple – also said to have been a former Waze suitor, with the device maker offering to buy the Israeli company for $400 million – Facebook does not have a driving app. Waze has built an active and loyal social network, one that is highly engaged with the app – just the kind of user Facebook craves, said local social media expert Yotam Tavor.

Waze also has a built-in mobile ad platform, and in its latest version supplies Google Maps-like recommendations. “That’s a big plus for Facebook, in the ongoing war for interaction with users,” and a plus for Waze, which wants to ally with a big company in order to remain relevant, given Google’s plans for its Waze-like Navigator app, Tavor added.

If a bidding war develops between Google and Facebook, the web search giant could have a significant advantage over the huge social network group. The talks between Waze and Facebook were said to have been held up over a demand by Waze that it keep the company’s R&D facilities in Israel, while Facebook would prefer to integrate it with existing facilities.

That issue is actually a crucial one, given Facebook’s tendency to take the startups in acquires and move them to existing facilities in the UK, Silicon Valley, or New York. Google, on the other hand, has several R&D facilities in Israel, and employs hundreds of engineers here – so integrating the already-existing Waze group into the Google infrastructure would be much simpler than getting Waze integrated with Facebook, Tavor added.

Any sale would make for a fantastic payoff for Waze investors. The company has raised $67 million in three financing rounds so far, most recently in October 2011.

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