Waze navigation application 370.
(photo credit: Courtesy Waze)
After months of rumors and speculation as to which global technology giant would
charm Israel’s homegrown traffic crowd-sourcer Waze into a partnership, Google
emerged victorious on Tuesday, announcing in a blog post that it had acquired
Both Apple and Facebook had reportedly entered negotiations with
the Ra’anana-based company in the past year, but failed to broker a final
Though neither Google nor Waze specified the cost of the deal,
Bloomberg cited sources valuing it at $1.1 billion, making it one of the largest
purchases in Israeli history and potentially netting the Finance Ministry nearly
NIS 1b. in tax revenues.
Yet Google’s announcement also raised questions
as to how long Waze would keep operating in the country as a separate entity, a
point of contention said to have thwarted Facebook’s advances.
product development team will remain in Israel and operate separately for now,”
Google wrote in its post, signed by VP Brian McClendon. The company 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.”
Waze CEO Noam Bardin,
however, seemed to put the prospect of eventual absorption into Google far down
“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,” he wrote in his own blog
post. “Our employees, managers, founders and I are all committed to our vision
for many years to come.”
As long as they continue to run independently,
Waze will benefit from Google search results, while Google’s mapping application
will incorporate real time data from Waze.
“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,”
Bardin wrote, adding that Google’s leaders “share our vision of a global mapping
service, updated in real time by local communities, and wish to help us
He also explained why the prospect of an acquisition by an
international company was more compelling than staying independent and going
public – the former a move with which 95 percent of Israeli start-ups agree,
according to a recent report submitted to the Israel Securities
“Choosing the path of an IPO [initial public offering] 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,” Bardin
Politicians praised the company’s success, and made their own puns
in the process.
Prime Minister Binyamin Netanyahu congratulated Waze for
“putting Israeli technology on the world map,” while Science, Technology and
Space Minister Yaakov Peri offered his hope that it would continue its endeavors
in Israel, without “recalculating the route.”
Having attracted nearly 50
million users since its founding in 2008, Waze became a hit with drivers in
Israel and abroad for offering accurate maps and suggesting the best driving
routes given real-time traffic conditions. Its innovative secret: following its
users. By tracking how fast drivers are moving on which roads, Waze is able to
figure out where the worst traffic is and direct its users
It can also easily detect when new roads have been built,
account for construction and allow drivers to alert one another to road hazards
That innovation became a major draw for potential buyers such
as Apple, Google and Facebook. Apple, in particular, stumbled in September with
the release of its own error-ridden mapping application for the iPhone.
Following an outcry, Apple CEO Tim Cook apologized and directed iPhone users
toward Waze as an alternative, but a rumored acquisition offer for $400 million
in January never materialized. Facebook, whose own reported billion- dollar
overtures never came to fruition, hoped to obtain Waze’s robust location based
usage data to boost its increasingly mobile-oriented strategy.
acquisition will help Google, whose own map application for iPhone sprang to the
top of the download charts when it was released, keep its competitive edge.