Waze is the inventor of a mapping program similar to Google (GOOG) Maps, but with an additional social component that employs GPS technology and open-source software to use real-time data from users in order to provide the most accurate and up-to-date information on traffic conditions, road construction and closure, and so on.
While it is not clear what exactly Facebook would do with an application like Waze, the fact that the company counts 45 million mobile users is likely the overarching reason for its interest. As mobile devices become ever-more embedded into everyday life, advertisers are finding new opportunities to reach consumers. Waze, for instance, could use GPS data to alert smartphone users to businesses and services that may be of relevance to them, based on their proximity to those businesses and services, and based on what Facebook has already gathered about a user’s preferences and personal tastes.
It is in this context that talk late last week of a potential counter-offer from Google had surfaced. Google is the only company that makes more mobile ad revenue than Facebook. Furthermore, it already has its own highly successful mapping software with Google Maps that is relatively unchallenged in popularity as it is.
But there are a number of benefits for Google all the same. The promise of 45 million more mobile users seeing ads from its advertisers, the bolstering of already solid and well-liked software with new and potentially relevant and useful innovations, and the removal of the possibility of a strong future competitor are all good reasons on their own.
Judging by its list of acquisitions over the past year, Facebook is throwing all its weight behind mobile. 2012 was the first year the company even counted revenue from mobile ads that now make up, as of the first quarter of 2013, $375 million or 30 percent of the company’s gross advertising income. Facebook is expected to take home some 30 percent of all dollars spent on mobile advertising in the U.S. 2013, while Google will retain over half of those dollars.
Earlier in the year, Waze had reportedly been in talks with Apple (AAPL), the company that should perhaps be the most eager to purchase a fresh and innovative mapping software firm given the disastrous release last year of its own mapping software with the iPhone 5. The figure being cited during those talks was $500 million.
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