Facebook negotiating to buy Waze for $1 billion

If the deal is realized, this will be Facebook's third acquisition in Israel, first two being Face.com and Snaptu.

Waze 521 (photo credit: Marc Israel Sellem)
Waze 521
(photo credit: Marc Israel Sellem)
Social networking giant Facebook is in the late stages of negotiations to buy Waze, the Israeli crowd-sourcing traffic and map application, for between $800 million and $1 billion, Calcalist reported on Thursday.
Tech Crunch, the blog that revealed a bid by Apple for the Ra’anana-based company in January, said it had confirmed the deal through private sources, though spokespeople for both sides refused to comment.
If the deal goes through at the reported price, it would be one of the largest acquisitions in Facebook’s history, rivaling its $1b. purchase of Instagram in April 2012.
According to the reports, negotiations began six months ago and stepped up in earnest at the start of the year, with Facebook representatives visiting Israel three times since.
One of the major sticking points for Waze, however, is the fear that Facebook will simply take the top talent and technology and close down the company’s operations in Israel.
If history is any indicator, that is Facebook’s plan; it’s exactly the course Facebook took with its first two acquisitions in Israel, Face.com, which it bought in 2012 for $60m., and Snaptu, which it bought in 2011 for $70m.
Founded in 2009, Waze already has more than 34 million subscribers, and expects to reach 70 million by the end of the year. In October 2012, it raised $30m. in venture capital funding.
While a deal between Apple and Waze – then reportedly stuck at $400m. – made obvious sense, given the spectacular failure of Apple Maps, the Facebook link is slightly more murky.
Spotting the trend of increased mobile usage, Facebook has been trying to convert itself to a mobile app.
Acquiring Waze could help add to its location-based data and boost its advertising potential.
Facebook would also be able to offer advertising to users based on their driving patterns, even before they left home, and not just based on content. And it could enable friends to share information while in cars, via both text and voice, about their driving experience.
Exposure through Facebook could boost Waze’s user database as well, which would enable the company to obtain a better picture of traffic conditions in different countries and provide more detailed road maps.
Globes contributed to this report.