Google Finalizes Acquisition of Waze Traffic App

By Todd R. Weiss  |  Posted 2013-06-11

Google Finalizes Acquisition of Waze Traffic App

Google is expanding its mapping services with the acquisition of the Waze crowd-based traffic and navigation app for mobile devices.

The transaction was rumored in various reports on June 10, but Google unveiled the finished deal on June 11 in a post on the Official Google Blog.

"To help you outsmart traffic, today we're excited to announce we've closed the acquisition of Waze," wrote Brian McClendon, vice president of Google's Geo unit, in the post.

"We've all been there: stuck in traffic, frustrated that you chose the wrong route on the drive to work," wrote McClendon. "But imagine if you could see real-time traffic updates from friends and fellow travelers ahead of you, calling out 'fender bender ... totally stuck in left lane!' and showing faster routes that others are taking."

That's where Waze comes in, he wrote, using user-generated reports on traffic and navigation information to help drivers ease their commuting stresses. "This fast-growing community of traffic-obsessed drivers is working together to find the best routes from home to work, every day," he wrote.

Google will pay $1.3 billion to acquire the Israeli community-based traffic and navigation app startup Waze to add to Google's growing portfolio of popular and revenue-enhancing mapping tools, according to the earlier reports.

Under the deal, the Waze product development team will remain in Israel and will operate separately for now, which were both issues that previously halted a recent possible acquisition of Waze by Facebook.

"We're excited about the prospect of enhancing Google Maps with some of the traffic update features provided by Waze and enhancing Waze with Google's search capabilities," wrote McClendon. "We'll also 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."

Dan Maycock, a mobile IT analyst for Slalom Consulting, told eWEEK that the Waze acquisition is a good move for Google.

"I think this strengthens Google Maps and helps them go after other GPS vendors as the tool you'll want to use to drive in your car, beyond what Google Maps is capable of today," said Maycock in an email. "Seeing Apple come out with the in-dash option in 2014 models of certain cars, and Nokia beta testing DRIVE leveraging their subsidiary Navteq, along with Microsoft SYNC platform, the car is becoming a hotbed for who will be the in-dash service you'll use for everything from traffic to music."

What the Waze move shows, according to Maycock, is that "along with Google's self-driving car project, that Google is serious about taking on transportation, and this purchase will not only be something that's integrated into Android as an ace in their in-dash services but also one of a number of acquisitions down the road that will lead up to their self-driving car initiative."

Google Finalizes Acquisition of Waze Traffic App

Carl Howe, an analyst with Yankee Group, told eWEEK that his impression of the deal is that Google bought Waze in large part to keep it out of the hands of two prime competitors, Facebook and Apple.

"It's taking it off the table," said Howe. Several years, ago, at an early Google I/O Developers Conference, Google engineers discussed their work with the idea of crowd-sourced traffic mapping technology and they were "surprised to find out that it didn't work very well."

Instead, Google Maps has received its traffic report data from commercially available fleet vehicle traffic reports from GPS systems, said Howe. "That turns out to be way more accurate than the crowd-sourced stuff."

Certainly, those earlier experiences could have changed since then for Google, said Howe. Maybe the company is looking to avoid spending money for the fleet data, he said.

But more likely, Google bought Waze just so it could keep the technology out of the hands of Facebook and Apple so that they "wouldn't have a competitive traffic product without building it themselves," he said. "It happens all the time."

For Google, it's probably "worth a fair amount of money" to block Apple, said Howe.

Google's discussions with Waze began after previous talks between Waze and Facebook failed to reach a similar agreement, according to the earlier reports. Those discussions came after yet another rumored deal arose in late 2012 when Apple purportedly was about to purchase Waze. At the time, the rumors called for Apple to acquire Waze to bolster its own mapping services, which had suffered after Apple tried to build a Google Maps replacement for its iOS 6 operating system in September 2012.

Waze is a mobile navigation app for iPhones and Google Android devices that allows drivers to build and use live maps, real-time traffic updates and turn-by-turn navigation.

Waze works by allowing users to crowd-source their commutes and other drives using the app to report traffic jams, accidents and other traffic details along the way.

Waze is free for users, which has contributed to its popularity.

After the Oklahoma tornadoes and Interstate 5 bridge collapse in Washington state in May, Waze crowd-sourcing was used to help drivers in those areas avoid the major traffic jams created by the disasters, according to the Waze Blog.


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