Reports: Facebook Is Buying Social Mapping And Traffic App Waze For Up To $1B To Court More Mobile Users

Posted: May 9, 2013 in Facebook, Technology

Facebook appears to be close to making another
billion-dollar acquisition to once again ramp up its
mobile efforts: according to three reports in the Israeli
press at Calcalist and sister publication Ynet and The
Marker (all in Hebrew), Facebook has approached
Waze, the social mapping and traffic app maker, and is now in advanced due dilligence on a deal that
Calcalist puts at between $800 million and $1 billion.
The negotiations between the social network and
crowdsourced mapping app apparently began six
months ago. We have been digging too and have picked up
confirmation from a source that both sides have
privately confirmed that the deal is happening, and
that the pricing reported in the two papers is accurate.
The only issue right now is whether to keep Waze in
Israel or whether to take to the U.S., as Facebook did with two previous Israel acqusitions of feature phone
interface developer Snaptu (bought for up to $70
million) and facial recognition specialist
(bought for $50-60 million). But! Facebook and Waze have already come back to
us with flat non-responses. “We do not comment on
rumors or speculation about the business,” a
spokesperson at Waze told TechCrunch. The
company tells me that currently has over 47 million
active users — more than double what it had in July last year when it reported 20 million. “We won’t comment on speculation,” a Facebook
spokesperson said. If the rumors are true, adding Waze to Facebook
makes a lot of sense in some respects: Facebook
has been putting a lot of effort into its mobile
business, which now has 751 million monthly active
users as of March 31, 2013, an increase of 54% year-
over-year. That puts mobile on a faster track at the moment than Facebook’s desktop business, which
currently has 1.11 billion MAUs, an increase of 23%
year-over-year. The most recent of its movements on mobile services
is Facebook Home, an Android-based launcher that
lets a user embed a connection into their Facebook
social graph into their entire mobile experience with
services like the ever-present Chat Heads. On
another track, Facebook has for years now been building up a business around location-based check-
ins, which also include local deals. A service like
Waze, with social networking and crowdsourcing of
information part of its DNA, makes perfect sense. This would not be Facebook’s first big acquisition in
the mobile space. Just over one year ago, leading up
to its IPO, Facebook bought Instagram for $1 billion,
a deal that had a large portion in stock and ended up
being worth more like $747 million when it finally got
approved. That, too, gave Facebook a big leap into mobile services: while Instagram these days also has
a handy way of viewing profiles on the desktop web,
at its heart it is a wildly popular mobile app that for
many works as a social network in its own right. Nor would this be the first time that Waze has been in
the crosshairs of acquisition rumors. One deal that
was hotly reported by many, including us, involved
Apple buying the mapping company. Of course that
ended up not happening, although the two clearly
were talking a lot because Waze ended up being a significant part of Apple Maps. Facebook earlier this year reported that it now has 1
billion users, and its likely that the next billion will
likely not be in the U.S. Waze has around one-third of
its users in the U.S. with the rest worldwide.
Facebook’s past acquisition of another Israeli startup,
Snaptu, which develops services for feature phones, was another deal that helped the social network
tackle the burgeoning population of mobile users in
developing markets; this, however, helps the
company take aim specifically at smartphone users. While Waze’s R&D is in Israel, its U.S. offices, and
its CEO Noam Bardin are based in Facebook’s old
digs before their move to Menlo Park, Palo Alto,
where the firm recently redecorated their front window.

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