What's This?
By Todd Wasserman2013-06-11 21:05:23 UTC
For Waze, mapping software proved to be a road of riches. The company's nine-year journey culminated on Tuesday, when Google agreed to pay a reported $1.03 billion to acquire the company. That price may have been inflated by a bidding war among Google, Facebook and Apple, according to rumors.
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Waze claims around 45 million users, but there's a good chance you're unfamiliar with the company and its app. If you're wondering why the Israeli firm became such a hot property of late, here are a few theories:
1. There aren't that many mapping software companies. Waze didn't have any real competitors. "I'm usually in sectors where there are 14,000 startups," says Scott Rafer, CEO of Lumatic, which provides mapping software for walkers, not drivers. "But in maps, you can't do it lean."
Waze currently has 110 employees. As Rafer notes, you can't do what Waze does with a staff of 15, which weeds out a lot of would-be contenders. Even with that manpower, though, you need time and, in Waze's case, a community of helpful users to get it right. "Mapping is hard to do," notes Julie Ask, a VP for Forrester Research. The other reason there are so few entrants is that many startups are petrified of competing with Google.
2. Google hasn't been great at cultivating a social network. The search giant has claimed as many as 500 million people are on Google Plus, but no one in the real world discussed Plus in the same breath as Facebook and Twitter. Waze's active community provides a social layer on mobile, which is doubly attractive.
3. Maps are super important. Forrester's Ask says mapping software is right up there with email and a browser in terms of functionality. This didn't used to be the case, but users have been spoiled by Google's excellent Maps — and have grown to rely on them.
4. It was a defensive move. Apple famously bungled its Maps app, but Facebook is way behind Apple with regard to mapping software. "They basically have what Foursquare has," Rafer says. That is, you can check in using Facebook's mapping software, but you can't plan a route. Depriving Facebook of good mapping software would allow Google to keep and bolster its lead. Brian Wieser, a senior research analyst with Pivotal Research Group, calls this tactic "protecting the moat." Wieser added, "Our view is that this transaction is a net positive for Google strategically, if only because it keeps Waze out of the hands of other companies."
Do you think Google was smart to buy Waze? Tell us in the comments below.
Image via iStockphoto, Mattjeacock
Topics: Business, google maps, waze
By Todd Wasserman2013-06-11 21:05:23 UTCFor Waze, mapping software proved to be a road of riches. The company's nine-year journey culminated on Tuesday, when Google agreed to pay a reported $1.03 billion to acquire the company. That price may have been inflated by a bidding war among Google, Facebook and Apple, according to rumors.
SEE ALSO: Beyond Barrel Roll: 10 Hidden Google Tricks
Waze claims around 45 million users, but there's a good chance you're unfamiliar with the company and its app. If you're wondering why the Israeli firm became such a hot property of late, here are a few theories:
1. There aren't that many mapping software companies. Waze didn't have any real competitors. "I'm usually in sectors where there are 14,000 startups," says Scott Rafer, CEO of Lumatic, which provides mapping software for walkers, not drivers. "But in maps, you can't do it lean."
Waze currently has 110 employees. As Rafer notes, you can't do what Waze does with a staff of 15, which weeds out a lot of would-be contenders. Even with that manpower, though, you need time and, in Waze's case, a community of helpful users to get it right. "Mapping is hard to do," notes Julie Ask, a VP for Forrester Research. The other reason there are so few entrants is that many startups are petrified of competing with Google.
2. Google hasn't been great at cultivating a social network. The search giant has claimed as many as 500 million people are on Google Plus, but no one in the real world discussed Plus in the same breath as Facebook and Twitter. Waze's active community provides a social layer on mobile, which is doubly attractive.
3. Maps are super important. Forrester's Ask says mapping software is right up there with email and a browser in terms of functionality. This didn't used to be the case, but users have been spoiled by Google's excellent Maps — and have grown to rely on them.
4. It was a defensive move. Apple famously bungled its Maps app, but Facebook is way behind Apple with regard to mapping software. "They basically have what Foursquare has," Rafer says. That is, you can check in using Facebook's mapping software, but you can't plan a route. Depriving Facebook of good mapping software would allow Google to keep and bolster its lead. Brian Wieser, a senior research analyst with Pivotal Research Group, calls this tactic "protecting the moat." Wieser added, "Our view is that this transaction is a net positive for Google strategically, if only because it keeps Waze out of the hands of other companies."
Do you think Google was smart to buy Waze? Tell us in the comments below.
Image via iStockphoto, Mattjeacock
Topics: Business, google maps, waze