Google has purchased online mapping service Waze in a deal that keeps a potentially valuable tool away from its rivals, while gaining technology that could improve the accuracy and usefulness of its own popular navigation system.
The acquisition announced Tuesday ends several months of speculation involving Waze, the Ra’anana-based crowdsourced driving and navigation app, which has more than 50 million users worldwide. The company flirted with suitors interested in its rapidly growing service, which blends elements of a social network into its maps to produce more precise directions and more reliable information about traffic conditions.
“To help you outsmart traffic, today we’re excited to announce we’ve closed the acquisition of Waze,” Google announced via a statement from Brian McClendon, a vice president at the company. “This fast-growing community of traffic-obsessed drivers is working together to find the best routes from home to work, every day.”
Google Inc. is believed to have trumped two of its fiercest foes, Facebook Inc. and Apple Inc., in the bidding for Waze. The start-up is based in Israel but also maintains a Palo Alto, California, office near all three of the Silicon Valley giants.
“The Waze product development team will remain in Israel and operate separately for now. We’re excited about the prospect of enhancing Google Maps with some of the traffic update features provided by Waze and enhancing Waze with Google’s search capabilities,” the company said, adding that it would work closely with the “vibrant Waze community, who are the DNA of this app, to ensure they have what’s needed to grow and prosper.”
Prime Minister Benjamin Netanyahu congratulated the company on the sale, saying the move had helped the state.
“Congratulations, you reached the goal,” he told company officials by phone. “You put Israeli technology on the global map. You are also contributing to state coffers, which is welcome at this time. I am waiting for your next start-up. You have done exceptional work.”
At Waze, the company’s leadership sought to assure their users that things were going to stay exactly the same and that their merger meant more time for employees to focus on improving the app and less attention to bankers and Wall Street.
Google shares our vision of a global mapping service, Waze said in a statement.
“Nothing practical will change here at Waze. We will maintain our community, brand, service and organization — the community hierarchy, responsibilities and processes will remain the same,” the company said in a statement. “The same Waze people will continue to collaborate with you, and we will continue to innovate our product and services, making them more social, functional and helpful for everyday drivers. Our employees, managers, founders and I are all committed to our vision for many years to come.”
The statement continued: “Why not stay completely independent? We asked ourselves: ‘Will Waze still be a fun project to participate in, and a fun place to work, as a stand-alone public company?’ Choosing the path of an IPO often shifts attention to bankers, lawyers and the happiness of Wall Street, and we decided we’d rather spend our time with you, the Waze community.”
The financial terms of the deal weren’t disclosed — but the Internet giant reportedly offered the Israeli company $1.1 billion, according to a report in the Israeli business newspaper Globes, $100 million higher than Facebook reportedly offered to pay for the firm earlier this year.
The purchase would be the largest buyout yet for an Israeli consumer firm, far outstripping Face.com’s $60-million sale to Facebook last year. Indeed, it is believed that the Waze purchase could be the biggest sum paid for any app, ever.
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.
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.
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.