Google Inc (GOOG) Didn’t Buy Waze for the Maps. At All.

Page 1 of 2

Israel-based mapping service Waze found a new home in Mountain View, Ca. The rumor mill provided plenty of speculation around Waze, tapping both Apple Inc. (NASDAQ:AAPL) and Facebook Inc (NASDAQ:FB) as potential buyers. For whatever reason, Apple Inc. (NASDAQ:AAPL) didn’t get a replacement for its Apple Maps debacle, and Facebook Inc (NASDAQ:FB) still doesn’t have an in-house mapping service of any kind. So off to Google Inc (NASDAQ:GOOG) Waze goes.

Google Waze

Waze’s crowd-sourced traffic and navigation data may seem like a nice plug-in upgrade to the good old Google Inc (NASDAQ:GOOG) Maps asset. But all of that is a sideshow for Big G. Waze’s real attraction here is the social aspect, where users not only send in automated GPS data but also get their hands muddy via hands-on status updates.

Think “Road work on I-95,” for example, or “Carbecue on Broadway.” This is the human spice that makes Waze worth something like $1 billion to Google Inc (NASDAQ:GOOG). And since that’s the big selling point, I think we know why Facebook Inc (NASDAQ:FB) didn’t bite. That company already defines “social media,” which pushes this target’s price tag out of Facebook’s reasonable deal range. No use paying extra for what you already do well.

Let’s back up a second. Maybe you didn’t know that Google Inc (NASDAQ:GOOG) Maps already does the main thing that Waze is famous for. When you drive around with a GPS-enabled smartphone (Android or Apple, doesn’t really matter) that’s set to share location data with Google, you’re already building Google’s real-time database of current traffic speeds. It’s been like that since 2009.

Google Inc (NASDAQ:GOOG) Maps traffic maps from 2009 on the left and 2013 on the right. Both were built on real-time location reports, much like Waze’s special sauce. Image sources: Google Blog and a quick screenshot.

Back then, it seemed kind of silly to base traffic information services on the fledgling Android platform. When the feature was introduced, the American market had exactly three Android models to the best of my knowledge. The original Samsung Galaxy was announced a week earlier. Around the same time, it was a big deal when the HTC Magic (a.k.a. T-Mobile myTouch 3G) passed the 1 million unit mark.

Page 1 of 2