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These Acquisition Targets Are Better for Facebook Inc (FB)

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Alas, it became official on Tuesday that Google Inc (NASDAQ:GOOG) has indeed purchased Waze, an Israeli-based company that developed a navigation app gained popularity throughout the world.

There has been much ado made about how Facebook Inc (NASDAQ:FB) may have lost out on a prime opportunity to get a foothold in the growing map and navigation space by not pursuing acquiring Waze. Preventing the dominant search engine giant Google Inc (NASDAQ:GOOG) from adding the company to its portfolio seems like it would have been an ideal strategy for Facebook.

Facebook Inc (NASDAQ:FB)

However, all may not be lost, as there are some players that long ago established themselves in the industry, and that makes them prime acquisition targets. They include Garmin Ltd. (NASDAQ:GRMN) and TomTom, which were among the early leaders in the map space. However, since the onslaught of mobile devices that boast high-tech map apps, these devices have lost market share.

At stake are billions of dollars in revenues anticipated as more businesses see the lucrativeness of advertising with mapping apps. Consider this: Opus Research estimated that mobile ads associated with maps made up about 25% of the roughly $2.5 billion spent on mobile ads last year.

So, while Facebook Inc (NASDAQ:FB) may have not moved on acquiring Waze, for whatever reason Garmin Ltd. (NASDAQ:GRMN) and TomTom are well positioned to make adequate additions to the Facebook lineup.

Garmin once considered the next Apple

During the early 1990s, portable navigation devices were all the rage. Mounted on vehicles’ dashboards, the devices quickly gained favor for the directionally-challenged. You may remember the devices, or you may even still rely on them to help navigate you to your destination.

During its heyday, Garmin Ltd. (NASDAQ:GRMN) was one of the fastest growing companies in the country. Some went so far as to call it the world’s next Apple Inc. (NASDAQ:AAPL) because of its rising stock price. In 2007, the stock hit $120 a share, fueled by investors giddy over the company’s strong sales. That year, sales doubled to $1.2 billion.

And then something happened, and that something was the smartphone. The shift from GPS devices to smartphones with map and navigation apps contributed to Garmin’s sales plummeting. Its market cap plunged to less than $4 billion in 2008 and is now about $6.7 billion.

Not to be outdone, Garmin Ltd. (NASDAQ:GRMN) has adapted and is trying new ways to stay competitive. For example, last month it announced a new integrated and portable navigation device for MINI vehicles. Called the MINI Navigation Portable XL, the device is designed specifically for MINI models and can be dealer-installed with a customized mount that goes next to the instrument cluster for optimal visibility.

While Garmin’s move with MINI is commendable, it is too small (no pun intended) in terms of dramatically increasing the company’s revenues, yet alone increasing shareholder value. Garmin Ltd. (NASDAQ:GRMN)’s largest business segment is its automotive and mobile business, but it also derives revenue for devices built for its fitness, aviation and marine segments.

TomTom Rules Now?

Then there’s TomTom. The sale of Waze means TomTom is one of the last independent providers of digital maps that cover the globe, as pointed out by the Wall Street Journal last month. The daily finance newspaper noted that such companies are “scare and valuable” assets.

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