Waze-Facebook talks are over, but Google takeover or IPO are still possible

Waze intends on remaining in Israel, sources say, and its newest suitor, Google, will probably let it do so.
Written by David Shamah, Contributor on

What appeared to be a sure thing just a few weeks ago – the acquisition of Waze by Facebook – has turned out to be a bust. According to All Things D's sources, Facebook and Waze have gone their separate ways.

But Waze has a new suitor, the publication's sources said on Wednesday: earnest talks are now taking place with Google, which has offered to top the bids from Waze's previous "fiancees", Apple and Facebook. While Apple reportedly offered $400m (£263m) for Waze earlier this year, and Facebook said to have bid more than $800m, Google's offer is said to top $1bn.

Bloomberg reported last week that Waze had recently conducted secret talks with Google in California. However, it had also been rumoured that some of Waze's top directors, as well as members of the board, were debating "going it alone", and were considering an IPO.

With more than 40 million users and a fully-developed social network and mapping system, several members of the board believe that the company could make it without being acquired by a big US company.

Many analysts in Israel believed that the Facebook deal was almost a sure thing considering the fact that Facebook does not have a mobile mapping and driving app, although its chief social media competitor Google does. Waze also has a built in mobile ad platform, and in its latest version supplies Google Maps-like recommendations.

Purchase or partnership with Waze "would be a big plus for Facebook, in the ongoing war for interaction with users", and a plus for Waze, which wants to ally with a big company in order to remain relevant, given Google's plans for its Waze-like Navigator app, said local social media expert Yotam Tavor.

But the deal is now off — most likely, according to analysts, because of Facebook's reported insistence that Waze move its operations to one of the company's existing R&D facilities, instead of allowing Waze to remain in Israel, as the company insisted on doing. The issue turned out to be a far more serious one for Waze and Facebook than had expected, Tavor said.

Google, on the other hand, already has extensive operations in Israel, so integrating Waze's 100 or so workers into Google's existing R&D infrastructure would be a much simpler matter than folding Waze into Facebook, Tavor added.

As to Google's motivation in seeking to acquire Waze, that is less clear, given Google's activity in the navigation mapping space already – but acquiring Waze would make Google the unassailable king of traffic, mapping and driving apps (and advertising), at least for the foreseeable future.

A Waze executive declined to confirm which talks, if any, were ongoing. "There's really not a lot I can say as we don't respond to rumors," he told ZDNet. That didn't mean, he said, that the talks were just rumors, though: "We don't comment on rumors and speculation in general."

However, he added, Waze is releasing a new version of its app on Thursday. "It will have Facebook events integration and a friends bar on the side of the map, which will show the order in which friends will arrive to an event," he said.

Ironic, perhaps, in the wake of Thursday's report?

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