Facebook Inc. (Nasdaq: FB) is in advanced talks to buy Israeli
navigation and traffic congestion app company Waze Ltd. for $500 million.
Waze declined to respond to queries by "Globes" on the subject. When asked
whether Facebook would close the company, as it has done with its previous
acquisitions, Waze replied, "Don't worry, we'll be all right."
There were reports in January that Waze was in talks with Apple Inc. (Nasdaq:
AAPL) at a company value of $400 million, but no deal materialized.
If the deal is realized, this will be Facebook's third acquisition in Israel
having bought facial recognition company Face.com in 2012 for $60 million, and
mobile app company Snaptu for $70 million in 2011. In both cases, the companies
were closed down in Israel with the senior executives going to work for Facebook
in California.
One major bone of contention is whether Waze should become a Facebook R&D center
in Israel or whether as in its previous acquisitions, the company would be
closed down.
In late August 2012, there were reports that Facebook was in talks to acquire
Waze, and the company's executive met with Facebook representatives in Israel,
but no deal emerged from the talks.
Waze has developed one of the most well-known and popular navigation apps on the
market. The app can be used by smartphones, tablets, and vehicle systems,
providing GPS navigation, crowdsourced-based updates about congestion, police,
traffic cameras, accidents, and road hazards. The company has more than 34
million subscribers, and expects to reach 70 million by the end of the year.
Founded in 2009, Waze raised $30 million in October 2012 from Li Ka-Shing's
Horizons Ventures, Kleiner Perkins Caufield & Byers, and Ifund. The company has
raised $67 million to date. Other investors include BlueRun Ventures, Qualcomm
Ventures, Microsoft Corporation (Nasdaq: MSFT), Magma Venture Partners, and
Vertex Venture Capital.
A link-up with Facebook could greatly improve Waze's performance, as it is
barely known outside Israel and the US. Exposure through Facebook could greatly
boost Waze's users database, which would enable the company to obtain a better
picture of traffic conditions in different countries, and provide more detailed
road maps.
For Facebook, Waze offers it the chance of contacting friends when they are in
cars. Facebook will be able to offer advertising to friends based on their
driving patterns, even before they leave home, and not just based on content.
Facebook could enable friends to share information while in cars, by both text
and voice, about their driving experience.
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(c)2013 the Globes (Tel Aviv, Israel)
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