This article was published on May 9, 2013

Facebook is reportedly in advanced talks to buy social GPS app maker Waze for up to $1 billion


Facebook is reportedly in advanced talks to buy social GPS app maker Waze for up to $1 billion

Facebook is in the final stages of negotiation with crowd-sourced traffic and navigation app maker Waze for an Instagram-sized acquisition of the Israeli company, reports local business publication Calcalist.

According to Calcalist reporter Assaf Gilad, who has a track record of getting things like this right (and then some), Facebook is in ‘advanced talks’ to buy Waze for $800 million to $1 billion in another move to beef up its mobile presence across platforms and geographies.

We should note that this isn’t the first time rumors about a Facebook-Waze acquisition have surfaced.

In the beginning of this year, Waze was rumored to be in talks with Apple for an acquisition, but these reports turned out to be, well, vapor.

Microsoft has in the past also been rumored to be interested in picking up Waze, but it seems the Redmond software giant has been working on another $1 billion purchase lately.

The Calcalist report is, however, more solid than any of the above.

What is Waze?

For those who don’t know, Waze is a social traffic and navigation app that is based on a large community of tens of millions of drivers around the world sharing real-time road info and more to everyone else’s benefit.

When the Apple rumors first started surfacing back in January, Waze had around 36 million users and was on track to double that number this year.

The company is said to have roughly 45 million users today, up from 40 million back in February.

In 2012, drivers shared 90 million reports as they drove 6 billion miles (9.66 billion kilometres). Also last year, 65,000 map editors made a total of 500 million map edits and updated Waze’s map to reflect 1.7 million changes on the ground.

All this community-driven editing took place in 110 countries.

Waze has raised $67 million in venture capital to date, from investors like Kleiner Perkins Caufield & Byers, Li-Ka Shing, Blue Run Ventures, Magma Venture Partners and Vertex Venture Capital.

Facebook and Waze

According to Calcalist, Facebook started talking to Waze about a potential acquisition six months ago and is now close to signing off on the deal.

Waze and Facebook are partners, having first teamed up in October 2012 when Waze launched an updated version of its mobile apps that allowed users to share their drive with their Facebook friends.

And when Facebook launched its Home launcher for the Android platform (to a slow start), it featured Waze prominently – and actually still does on the Facebook Home product website.

It’s also worth noting that, at the recent D:Dive Into Mobile conference, Waze CEO Noam Bardin name-checked Facebook Home when he was talking about the future of mobile.

Bardin was also spotted on the Facebook parking lot by Bloomberg TV reporter Jon Erlichman about a month ago. :-)

Facebook’s mobile surge

On the heels of Facebook announcing its Q1 2013 earnings, the social networking company revealed that it now boasts 751 million mobile active users, an increase of 54 percent year-over-year.

It has also reported ad revenue in the first quarter of $1.25 billion with 30 percent coming from mobile, or $375 million.

The company isn’t shy about its further ambitions when it comes to mobile, and has been making acquisitions left and right to beef up its portfolio of products, hire mobile development and user experience talent and stay ahead of the curve.

Facebook has in the past also made a couple of acquisitions in Israel, namely Face.com and Snaptu.

Buying out Waze would be a way for Facebook to further arm itself in the battle with Google for Internet dominance.

Image credit: Thinkstock

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