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Google Says ‘Yes Waze’ and Spends Over $1B for Traffic Reporting Service




Waze ScreenshotGoogle is getting even more serious about mapping lately, if that is even possible. So serious in fact, that they have reportedly shelled out somewhere just north of $1 billion to acquire Waze, a company that is relatively unknown (compared to other $1 billion purchases like Tumblr by Yahoo!). Even TechCrunch reports on the purchase with the following headline

WTF Is Waze And Why Did Google Just Pay A Billion+ For It?”

Good question. The reports have been swirling for about a week and Waze was being courted by all the big boys including Apple and Facebook. Google, however, won out with money and this from its CEO Noam Bardin which was posted on the Waze blog after the big win.

We are excited about the prospect of working with the Google Maps team to enhance our search capabilities and to join them in their ongoing efforts to build the best map of the world,” he said, before revealing that “nothing practical will change” after the acquisition, and that Waze “will maintain [its] community, brand, service and organization.

Essentially Waze is a crowdsourced traffic monitor that helps its users find out where the traffic trouble spots are then routes them around the problem. The TechCrunch article says

Amidst a flood of third-party mobile mapping apps that have emerged since, Waze is today pushing 50 million users (up from 30 million in October) and has managed to find a steady growth curve thanks to its crowdsourcing formula. Rather than assiduously map out every single road, lane and byway, Waze relies on its millions of users to act as traffic cops, field ops and cartographers, allowing them to flag and record updates on accidents, bottlenecks and traffic in realtime. It pulls in information from your phone on your speed, location and so on to calculate the best routes and build out its own maps.

That’s pretty cool. But is it $1 billion cool? Well, considering who was looking to buy it (in particular Apple who announced a new and improved Apple maps at the WWDC earlier this week but still suffers in mapping credibility after the initial train wreck that was introduced to replace Google Maps last year) this company is certainly on to something.

As you might guess,that something is more than just good traffic. It’s the potential for advertising which it is already selling.

While it’s always working to be seen as some sort of next-gen digital utility provider, Google is first and foremost an advertising company. Really, many of its services’ main function is to help their customers get their ads in front of their users. Google advertising can be a key asset to Waze going forward as it looks to expand its own revenue potential and advertising platform.

Up until recently, Waze had put monetization on the backburner, focusing on growth and product. But, late last year, Waze rolled out its own Ad product, which is essentially a “location-guided ad platform for local business owners and big brands that want to attract the attention of nearby drivers.”

For now the service is going to be operating independently as is noted here when the Waze CEO tells his rather loyal following

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 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.

Two words on that one: yeah right. It reads nice and it’s a very cool thing for a CEO of a community driven service to say but how often has Google purchased something then left it alone to its own devices? If it is not going to be integrated then why would they buy it? Just to keep it from Apple? That’s good for Google but there has to be more and with the new Google Maps sitting on the horizon this might be a pretty nifty way to not only make maps look nicer but much more practical.

In the end a billion bucks isn’t much to Google so the price tag isn’t the real story here. The real story is that Google is protecting its position as king of the mapping hill and it realizes that it can’t stand still and effectively do that. That’s bad news for the competition.

What’s your take?