Google following Facebook's Waze?

If the Waze acquisition rumors continue, I'm going to run out of punny titles for blog posts.

After the rumors two weeks ago about Facebook's negotiations to acquire Waze, the social mapping and navigation company, now rumors have emerged that Google is also interested in acquiring this Israeli superstar start-up.  (Of course, don't forget that Apple was rumored interested a few months ago.)

While we'll all need to wait and see how this pans out, here are a few things to think about.

First, rumors say that the main sticking point in Facebook's negotiations is whether Waze R&D will remain in Israel or move to California. Google would presumably be easier on this subject, since they have several Israeli R&D centers already.

Second, I stick with what I wrote in a recent article on SeekingAlpha analyzing Facebook's interest in Waze:

Google is starting from the opposite end as Facebook but working towards the same goals - they have the popular mapping and location applications and are trying to gain a strong foothold in social networking. But for this reason, a Waze acquisition would help Google less than Facebook - it would improve what they have and move mapping in a social direction, but since they already have Google Maps, Waze wouldn't be as transformational an acquisition as it would be for Facebook.

That doesn't mean, of course, that Google won't decide to use some of its cash on hand to buy Waze, both to improve Google Maps and to deny Facebook and others from catching up. The acquisition would also firm up Google's positioning on iOS devices.  But it's a much less transformational and strategic an acquisition for Google than it is for Facebook.

Third, all these rumors are great for Waze's user base. In October, 2012, before the Apple acquisition rumors, Waze had just below 30M users.  In February, 2013, after the Apple rumors, they were up to 36M users.  Now, as the dust settles on the latest rumors, Waze is up to 47M users.  Of course, all those users may have joined Waze even without the rumors, since Waze is a great mapping and navigation app, beating Google Maps in a number of areas.  But nonetheless, the rumors appear to be good for Waze however they turn out.

Fourth, regardless of M&A, Waze is a great app. Besides using their crowdsourcing to provide great navigation routing, they're poised to exploit the social side of mapping and navigation in even more powerful ways. Whether they end up within Facebook, Google, Apple, or someone else, or keep going on their own, we have a lot of fun ahead of us in social mapping.

Bottom line, my bet is still on Facebook, since I think they have the most to gain from Waze. But Google's such a heavy M&A Goliath that it's hard to bet against them for any acquisition.

1 comment:

  1. I enjoyed reading this post and your article on Seeking Alpha.
    Facebook acquiring Waze makes sense. They can overcome the R&D location issue and get a foothold in the Israeli Hi-Tech.
    I wonder what Microsoft and Qualcomm, who are invested in Waze, think about waze's different suitors...

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