Why did Google acquire Waze ?

        Reports are coming in today morning that Waze will be acquired by Google.  If your were not following the news, here is a quick digest.  Waze is a mobile mapping app which got to prominence for its real time traffic information using crowd sourced information.  Based out of Israel, the company was in news lately as there were multiple bidders from the likes of Facebook and Apple.

        I can understand why Waze was a hot acquisition target. Maps are considered as very important tool in any company’s basket which is aiming for glory in highly crowded smartphone and wearable device market.  Location info is a highly valuable input for user profiling and ad targeting.  The stakes are so high that Apple was worried about Google Maps as its default mapping app ( There are debates on this though) .  Both Facebook and Apple were bidding for Waze.  But eventually Google won the battle.

        Google Maps are considered as golden standard for digital mapping .  So what prompted Google to acquire Waze at 1.3B$ valuation which is one of its most expensive acquisitions.  To have a quick idea about it – listen to what Waze CEO said sometime back – Waze’s only real competitor in Mobile space is Google Maps.

       In my opinion, Google just thwarted its biggest threat in mapping.  A standalone Waze could not have done much threat to mighty Google Maps. But in the hands of companies like Apple or Facebook, especially Facebook it’s a big threat to Google’s core business of ad targeting.  Facebook already has an upper hand with treasure of user data, adding a solid location framework on top could have helped its yet to takeoff ad business.

     People like your or me can only speculate on the reason for the acquisition, we will never know what the real reason was.  If you look at the functionality of the two apps, there is not much Google Maps is really lacking.  Google added real time traffic info to its mobile apps which has been Waze’s USP, so that has been evened out.  If you look at review boards on why people like Waze ( especially who has experience with both Google Maps and Waze)  they cite out two different use cases.

  • Initially you need to Plan for your route. This is Google’s fortress, it will be tough for any company to break this.
  • Once you are on the road the equation changes – You need help on turn by turn navigation . But the icing on the cake is the granularity of traffic updates like traffic incidents, Speed guns etc.  This is where Waze wins – its provided by other Waze users  and almost real time.  Google can tell you that there is congestion – but it will not tell you that how severe it is,because it lacks context.  But Waze will tell you that there is serious incident and its better to take another route;  provided you have options.

      So can we expect Waze functionality on Google Maps ?  A definite yes but not sure how long it will take.  Google has decided to retain Waze brand and retain the Israel office and its employees for up to three years as per the deal – says news sources.  That would mean Waze app will still be around.

     What this would mean to other giants ?  Tech evangelists are already wondering why Yahoo didn’t bid for Waze.  By now everyone knows that Maps are hard but still it is a necessity – unless autopilots take over every transportation options that we know of.  There are only two distinct approaches for making maps in my opinion.

  • The traditional way – you collect data from N number of sources and create a beautiful interface for the maps.  But unlike traditional software verification, verifying the data sources is extremely hard in maps case.  You cannot send people to verify whether the road or landmark exists. Another pain is that this information constantly updates and you need to keep pace.  An end user does not care the fact you need some time to update your maps for a road closure –  if you are rushing to a destination and find that there is a road closure at the last minute, you are going to curse the maps no matter what.
  • Crowd source – In my opinion this is the best approach.  The problem with this approach is that your maps are only good as the number of users and user engagement.  I strongly feel that even Google Maps have a long way to go in countries like India where the density of information is sparse.   In fact I would want Google to pay for the users who is helping with crowd sourcing.  Google will make a lot of money in the long run – so why not show some gratitude for the volunteers.

  Hope this acquisition does not create a monopoly for mapping apps. It took Apple Maps to force Google to come with a better design for Google Maps !

Competition is good for everyone !

Happy Sunday folks !