See below, after some background, for what I think is the most interesting element in Google's acquiring Waze, which is Waze's potential integration into Android.
Here's what I wrote about 2 months ago about the prospect of Google acquiring 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.and here's my follow-up about a month ago:
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....
...Google [may] 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.
It's an exciting prospect to think of Waze being integrated into Google Maps.
The biggest aspect of Google's acquiring Waze, that I haven't seen discussed much, is that Waze technology could be incorporated not only into Google Maps but into Android. What this means would remain to be seen. It might mean that all Android phones with Location Services activated could have their movements automatically analyzed for traffic pattern analysis. It might mean that Android calendars could automatically tell you how long it will take (in real-time traffic conditions) to get to your next appointment. It might mean a lot of things. Whatever it means, it'll definitely be exciting.....