Google Buys $1Billion Traffic App Waze

If you haven’t heard of the app Waze before you are just about to because Google is buying the Israeli company for a reported $1billion.  This will give Google a boost in the battle in mobile mapping space against both Apple and Facebook.

Many people are questioning why Google would want to part with $1billion for a start-up company who are relatively unknown, but they have their reasons.  Firstly Waze is a real breakthrough for mobile navigation apps because it uses a user-based approach to mapping.  Secondly Google are using smart defensive play because the company poses a threat to their own popular Maps product.  Lastly, by purchasing Waze it means that Facebook and Apple cannot and both have reportedly been interested in the company for many months.

In recent times map apps have soared in popularity and in the last year Google and Apple have both been fighting to retain user loyalty in the mobile-map space.  Map apps are widely used and so software companies understand that they are a key priority in the mobile wars.

Waze has been described on its websites as joining “other drivers in your area who share real-time traffic and road info, saving everyone time and gas money on their daily commute”.  So what is Waze’s goal?  They say “to outsmart traffic and get everyone the best route to work and back, every day”.  What is fantastic about Waze is that their users will receive alerts on their mobile about any traffic hazards that are based along their journey to their location.

Terms of the deal with Waze have not been disclosed but it is believed to be $1billion in cash and a further $100million payout in performance payouts to Waze staff.  Google is buying Waze for much the same reason as Facebook bought Instagram, as they posed a threat and built a superior and more popular photo-sharing service.  Google has bought Waze to remove the competition so it is all about defence.

CEO of Waze, Noam bardic, said that they believed Google to be the best partner for Waze as they share a common goal and they allow them independence and the resources to succeed.  The company was founded in 2007 with only 100 employees, most of them based in Israel.  However they did have offices in both New York and Silicon Valley.  It has been reported that Waze rebuffed Facebook because they insisted on their Israeli employees continuing to work in Israel but Facebook would not accept this.

It is thought that Waze will remain an independent app but will have some of its features incorporated into Google Maps.  An early investor in the company was reported to be Microsoft but they did not put any bid in for the company officially.

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