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What does Facebook want with Waze?

Reports indicated that Facebook is in talks to buy Waze, an Israeli-based maker of GPS and mapping apps, for a whopping $1 billion. 

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Waze
A screenshot from the mapping app Waze.
  • By Matthew Shaer

Facebook is gearing up for an acquisition of Waze, the Israeli-based GPS app maker. 

That's the report today from a range of Israeli publications, including business paper Calcalist, which puts the deal at $1 billion – roughly the same price Facebook paid for photo streaming service Instagram. Big caveat here: Neither Facebook nor Waze is confirming the reports. ("We don't comment on rumor or speculation," a Facebook rep said in a statement to CNET.) 

But according to Ingrid Lunden at TechCrunch, who spoke to a source with knowledge of the talks, an acquisition is definitely in the offing. 

"The main issue right now, the source said, is whether to keep Waze in Israel or take it to the US, as Facebook did with two previous Israel acqusitions," Lunden notes. "Those were of feature phone interface developer Snaptu (bought for up to $70 million in March 2011) and facial-recognition specialist Face.com (bought in June 2012 for $50-60 million)." 

So what does Facebook want with Waze, anyway? Well, as opposed to a straightforward GPS app such as Google Maps, Waze is community driven – it takes input from users and creates color-coded maps of high traffic areas and accidents and police activity. We can envision a scenario where Facebook integrates Waze into its mobile app to create an extra layer of social media content.

Obviously a billion bucks is a lot to pay for a GPS app. But as Raymond James analyst Aaron Kessler told Reuters today, in the end, it may be worth it for Facebook. "A lot of these companies want to own mapping services as opposed to licensing," Mr. James said. "The advantage is that you could personalize it to your business."

It's worth noting that Apple, which weathered a major map app flap last year, was once said to be in talks to acquire Waze for $500 million – half what Facebook is apparently willing to pay. Those talks came to nothing. 

For more tech news, follow us on Twitter @venturenaut.

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