Facebook to acquire navigation App Waze for $1bn?

Facebook to acquire the Waze app

Facebook to acquire the Waze app

If news bytes by people in the know-how at Facebook Inc. are to be believed, a high-net-worth-navigation app called Waze is likely to be acquired for an astounding $1 billion. Waze is a free-to-use navigation tool for mobile devices and popular in more than 193 countries. Founded in 2008 in Israel, it has offices in New York, California and Israel, and employs 100 or more people. It has some of the best mapping information available online and has over 50 million users. The app gives subscribers route directions based on updates received from other users so that they can avoid  exhausting traffic jams and steer clear of roads blocked due to various reasons. The uniqueness of the Waze app is its value-addition as a social network. Waze currently earns all revenue through advertising the real estate.

Facebook has been exploring other mobile asset spectrums ever since its initial public offering (IPO). Currently, Facebook Inc.’s shares are worth around $27.04 – a figure much less than the IPO price of $38 in May 2012.

Facebook Inc. has been on an asset building-spree since then and has purchases the highly trendy photo-sharing app Instagram, which is also widely used by celebs, for $700 million with a cash-and-stock deal.  Parse, a highly priced start-up involved in building mobile applications, was also snapped-up by Facebook recently as the social giant aims to expand.

How will Waze help Facebook?

Facebook Inc. is keen on acquiring the Waze app to expand its mobile assets portfolio and add key function features to the current mapping services it provides. Facebook is already geared to generate more revenue through its mobile advertisements.

Waze will offer the best opportunity for Facebook Inc., for the navigation app is used increasingly in crowded, dense cities. Facebook Inc. will now be at the centre of navigation communication and from subscriber user patterns mine valuable ‘big data.’ Additionally, it will acquire the keen capability to optimize its location-based advertisements.

It is likely that Facebook Inc. will now allow commercial establishments such as restaurants or stores to place ads for Waze users as they navigate in the vicinity of the stores.

Acquisition bound to happen

Though, there is a likely possibility of the deal not going through at all, industry analysts believe that the acquisition is an event waiting to happen. It all began when the Waze app offered its users log-in facility through Facebook Inn.

Another interesting fact is the friendship that stakeholders at Facebook and Waze have: the CEO at Waze, Noam Bardin shares with the current local-service chief at Facebook Inc., Josh Williams, was bound to influence the acquisition. Interestingly, Josh Williams own self-grown app – Gowalla- was snapped by Facebook Inc. for its location based prowess; ever since then, Williams has headed the local-services segment for Facebook Inc. Additionally, an ex-Gowalla VP, Andy Ellwood, currently heads Waze’s Business Development section.

With Facebook Inc. seeking to further strengthen its mobile products segment by acquiring a cross-section of mobile-use products, Waze CEO, Mr. Bardin, is already enthused about the deal.

Avatar
Richard Meryn
Richard Meryn, Associate Editor Industry Leaders Magazine (www.industryleadersmagazine.com)

Recent Posts

Moderna forecasts $18.4 billion revenue for 2021

Moderna forecasts $18.4 billion revenue for 2021

Moderna Inc., the Boston-based biotech startup, reported its fourth quarter and 2020 fiscal year results, where it announced that it hoped t...
2 hours ago
Hyundai Motor recalls 81,000 EVs for battery defect, may prove to be the costliest recall

Hyundai Motor recalls 81,000 EVs for battery defect, may prove to be the costliest recall

Hyundai Motor says the vehicle recalls are expected to cost the company about 1 trillion won or an estimated $900 million. In South Korea, 2...
2 hours ago
Accor reports $2.5 billion loss, hopeful of a recovery by next year

Accor reports $2.5 billion loss, hopeful of a recovery by next year

Accor, Europe’s largest hotel chain, reported a $2.5 billion net loss in 2020 due to the deterioration in the industry linked to the sprea...
1 day ago
Is the sun shining again on AMC stock?

Is the sun shining again on AMC stock?

As the old adage goes, good things come to those who wait. This might come true for movie theatre operator AMC Entertainment Holdings Inc. w...
1 day ago
HSBC turns to Asia for future growth

HSBC turns to Asia for future growth

The bank’s maximum pre-tax benefits (90%) come from its Asian business. Chairman Mark Tucker and chief executive Noel Quinn are strugg...
2 days ago
Wells Fargo to forego asset management unit to private equity for $2.1 billion

Wells Fargo to forego asset management unit to private equity for $2.1 billion

Wells Fargo has been underperforming for the past few years and has undertaken cost-cutting and restructuring to improve its numbers. Wells ...
2 days ago