Facebook Rumored to Be Conducting Due Diligence to Acquire Waze

Michael Teague |

Unofficial reports have it that Facebook (FB) is in the late stages of a deal with Waze, the Israel-based maker of a mobile traffic and mapping app.

While representatives of both companies have refused to comment on the negotiations, the Hebrew-language publication Calcalist is reporting that a term sheet has already been signed and Facebook is currently doing advanced due diligence.

The move comes after Apple (AAPL) had approached the company only a few months ago with a $500 million buyout offer.  Facebook’s offer is reportedly worth substantially more, between $800 million and $1 billion.

Waze is a mapping program much like Google’s (GOOG) Maps app, but that combines GPS technology with open-source software in order to cull real-time data from users’ smartphones and give the most accurate and up to date information, not only on streets and roads, but on the specific conditions of those streets and roads at any given time.  The app is constantly updated by drivers so that it can provide the most accurate information possible as to road closures, construction, traffic, and so on.

Since last July, Waze has grown its mobile user-base from 20 million to 45 million.  Given Facebook’s current all-in strategy with regard to mobile, what with the release of Facebook Home and its HTC smartphone, the purchase of the Israeli company makes a great deal of sense.

Furthermore, this would not be the only Israeli acquisition Facebook has made.  In March 2011, the company purchased smartphone interface developer Snaptu for $70 million, and in June of last year acquired facial recognition software developer Face.com for between $50 and $60 million.

However, it is not entirely clear what Waze will be used for if and when the deal goes through, though it is probably a safe assumption that it has something to do with Facebook’s ongoing quest to wrest a larger share of mobile advertising revenue from Google, its main rival in this field, as well as to erect some barriers to competition from Apple, whose own mapping program was released last year with less than spectacular results.

Shares for Facebook had nudged up slightly during trading on Thursday, nearly 1 percent to $27.37.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AAPL Apple Inc. 113.05 0.87 0.78 36,379,106
ECL25 Ecolab Inc. 2.625% Euro Notes 2025 n/a n/a n/a 0
FB Facebook Inc. 128.27 0.18 0.14 18,402,945

Comments

Emerging Growth

Enertopia Corp

Enertopia Corp is engaged in the exploration of lithium in Nevada, USA. The Company's project includes Central Nevada Lithium Brine Projects.

Private Markets

BioSculpture Technology, Inc.

BioSculpture Technology, Inc. (“BST”) is a commercial-stage medical device manufacturer of liposuction surgical instruments for surgeons. It offers the FDA-cleared Twin Cannula Assisted Liposuction ("TCAL") Airbrush Liposculptor IIIntellimotion® controllers, Airbrush®…

Uber

Uber connects riders with safe, reliable, convenient transportation providers at a variety of price-points in cities around the world. Uber makes money from charging their drivers 20% of the fare…