Recently, there’s been a lot of drama in the tech world about Waze, the Israeli online mapping company that has grown popular with mobile users. At first, Apple (AAPL) appeared to be on the verge of taking over the company to grow its Apple Maps service, but the talks ultimately fizzled out. Facebook (FB) then nearly took over the company for $1 billion before hitting an impasse regarding the relocation of its Israeli engineering team to Facebook’s U.S headquarters. Facebook had also wanted to acquire Waze to enhance its own mapping service, which currently depends on Microsoft’s (MSFT) Bing Maps. Now, search giant Google (GOOG) has entered the picture, and is reportedly finalizing the deal for $1.3 billion. However, Google already has its own map service – the industry standard Google Maps – which has led many investors to wonder if Google is simply buying Waze to keep it out of its competitor’s hands. Daily Chart What separates 4-year old Waze from the competition is the fact that it is a crowdsourced map service, which allows its users to report on road and weather conditions to other users. This has made it a more reliable source of real-time road information than comparable map services. Apple wanted the service to improve the reliability of its Apple Maps, which have been ridiculed for erroneous directions and incomplete maps. Facebook had bigger plans for Waze, since the social aspect of its maps could be merged with the company’s location-based check-ins and recommendations. Merging with Waze could have allowed Facebook to catch up to social recommendations site Yelp (YELP) very quickly. Meanwhile, Google has both of these strengths already. Its maps are superior to maps by Apple or Microsoft, and its Maps have already been merged with its Places app, which allow for location-based check-ins and suggestions. Therefore, Google’s acquisition of Waze seems redundant and primarily aimed at asserting its dominance over the online maps industry. Analysts believe that Google could face major antitrust issues if the deal goes through. Waze currently has 47 million users, and has raised $67 million in funding to date from Qualcomm QCOM and several private equity firms. Waze CEO Noam Bardin and a small group of employees currently work at its U.S headquarters in Palo Alto, California, while the other 90 of its employees are still located in Israel. Google’s indifference to the global location of the bulk of the company’s staff suggests that it intends to allow Waze to remain independent. Although it may integrate some of Waze’s features to enhance the traffic feature of its Maps application, it will likely remain a separate service. Over the past three years, the convergence of mobile technology, location-based services and social media have all made these remaining small companies very valuable. Yahoo (YHOO), for example, has been on a shopping spree over the past year to increase its footprint in all three of these areas. Other News About GOOG Google Tests Balloons to Beam Internet From Near Space Google uses balloons to send Internet signals to remote areas. Google Calls U.S. Data Request Disclosures a Step Backward for Users Google asks for more transparency from the U.S. government. Other Stocks in the News Investing in the Perfect Peanut Butter & Jelly Sandwich Should you invest in peanut butter and jelly? Two Summer Retailers to Buy and One to Avoid Which summer retailer is doomed? Copyright 2013 by InvestorGuide.com, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA InvestorGuide.com, Inc.) or its employees responsible.
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