What is Waze and Why Is Facebook Bidding $1 Billion Dollars Against Apple To Buy It?


The mobile technology sector is far from small potatoes nowadays. Facebook is primed to spend $1 billion dollars acquiring Waze to compete with Apple and Google in the mobile technology world.

Facebook is bidding against Apple for the Waze, in a deal that may have broken the billion-dollar mark. But what exactly is Waze and how will it help Facebook take on the other mobile giants, Apple and Google? 

Waze is a free social GPS application developed by an Israeli start up called Waze Mobile. The application differs from most normal map apps as it is focused around the community of Waze users. Waze users can report information into the app and the app will make real-time updates to its routes, such as detouring and real-time traffic updates.

The app crowdsources this information to improve the overall experience for all users. Other improvements have been added over the development cycle such as the ability for users to enter the latest gas prices for other users, gamification elements such as points for driving over certain points in a road so Waze can get more detailed information about less visited information, and Google Maps-like recommendations. As of July of 2012, Waze hit 20 million users.

Why would Facebook be bidding over $1 billion dollars for a map app? Waze may have won a prestigious Webby award but it's nothing like Instagram, Facebook latest $1 billion dollar acquisition. Instagram has over 100 million users and is a cultural phenomena that has become a verb i.e. "Instagram it." Waze is nowhere near that.

Waze would provide Facebook with a way to complete with Google and Apple in one area that it currently is dependent upon the two: mobile maps. It seems a little strange, but maps are a key factor in smartphones and other mobile devices in the current mobile technology market.

By acquiring Waze Facebook can roll Waze's highly active user base into a successful seed audience for the greater Facebook audience, use its built-in mobile platform to penetrate the mobile market, and gain a share of mobile advertising from localized recommendations from the app, a revenue stream that Apple and Google tap already.

If Facebook want to compete with Google and Apple in the mobile technology world acquiring Waze makes sense, as it would make the Facebook platform a more complete system so the user never has to use a competitor's product. Already this can be seen with the launch of Facebook Home, the most visible attempt to broaden Facebook from "that site where you post pictures of babies and cats" to a digital suite of services that all revolve around the same company, much like Apple and Google.

It remains to be seen if Waze will be the answer for Facebook's new foray into the digital world. Time will tell if this will allow it to compete with Apple and Google on a new front.