Rumor: Facebook Looking To Acquire Israeli-Based App Waze
Facebook may be gearing up to enter the mobile mapping space. Reports from three Israeli newspapers, including Calcalist, maintain the social network is in talks with Waze, a crowdsourced navigation and live traffic-mapping app based in Tel Aviv, to purchase the company for the hefty price of $800 million to $1 billion. According to Calcalist, the two firms have been discussing a possible acquisition for about six months.
Already called the Facebook for drivers, Waze, founded in 2007, offers a system that incents drivers to share traffic updates through the app. For example, if one user is stuck in traffic, he or she can post the update through Waze and other drivers will know to avoid the particular route. The company relies on tracking users to build its mapping database. The more users share, the more accurate Waze’s maps become. The company currently boasts more than 47 million active users—an increase from 20 million in July 2012. Integrating Waze’s technology could certainly enhance Facebook’s existing check-in and location services.
According to rumors, Apple offered to buy Waze last year for $400 million and an additional $100 million in incentives. If the Facebook deal pans out, Waze will have certainly made a wise choice in turning down Cupertino. The alleged offer of as much as $1 billion is rather extraordinary for a company that has yet to turn a profit. Although Waze has managed to land some advertising deals with AT&T and Taco Bell, it has struggled to add enough advertisers to its location-based ad network. Waze did manage to raise $67 million in venture funding from Kleiner Perkins, Blue Run Venures and Hong Kong-billionaire Li Ka-Shing, however. A billion-dollar buyout would definitely reward those investors handsomely for their early faith in the firm.