Facebook may be poised to make another billion dollar purchase, this time by acquiring mobile map technology. Waze is a “community-based” traffic and navigation app that uses satellites and user input to help drivers find the best routes. Waze was the judges’ choice for Best Overall Mobile App at the GSMA’s Global Mobile Awards 2013. Last year the company added a hands-free feature to decrease the safety risk of sharing data while driving.
Waze is based in Israel, and the report of Facebook’s interest broke in the Israeli financial press. Calcalist reported that Facebook and Waze have been in talks for six months, and that the two companies are discussing a deal valued at between $800 million and $1 billion. If completed, this would actually be Facebook’s biggest acquisition to date. The company famously offered $1 billion for Instagram last year, but it paid in stock and by the time the deal close Facebook’s stock had lost value and the final price tag was closer to $700 million.
Facebook’s focus on mobile has been the company’s major story this year, so a mobile app acquisition makes sense. Advertising from mobile comprised 30% of Facebook’s first quarter revenue, versus just 23% in the previous quarter, but mobile’s share of advertising is still far below its share of page views on Facebook. Advertising is a key part of Waze’s business model; the company offers customers a way to promote their businesses to nearby drivers.
The purchase of Waze would put Facebook more directly into competition with Google. But competing with Google Maps may not be easy, as Apple learned the hard way earlier this year.
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