As one of the greatest gangsta rap artists of all time, 2Pac, once said, “There’s war on the streets.” And while the late great poet may have been referring to gang violence and the Bad Boy/Death Row feud, his words (in)appropriately sum up some of the latest developments in California.
Google Inc (NASDAQ:GOOG) and Facebook Inc (NASDAQ:FB) may be going head-to-head in a vie for the streets … mapping app, Waze. The app is even spelled how 2Pac would spell it. It’s like he’s still alive making relevant music today!
“Ambitionz Az a Ridah”
Two weeks after news broke that Facebook Inc (NASDAQ:FB) was in talks with Waze to acquire the Israeli based company for $1 billion, Google Inc (NASDAQ:GOOG) reportedly made a similar offer.
Waze, which has nearly 50 million users, just started monetizing the business in November of last year. It claims its users spend an average of 7.5 hours a month using the app, providing it with an ample opportunity to cash in on the growing local ad business. Local advertising spend on mobile is expected to reach nearly $2 billion this year and $6.4 billion by 2017.
With a strong position in a rapidly expanding market, Waze may think of itself as more valuable than $1 billion. It’s last round of funding in October 2011 valued the company at $250 million. Earlier this year, it turned down an offer from Apple Inc. (NASDAQ:AAPL) worth $500 million. And now, just five months later, it has two bids for $1 billion. Waze may be ‘ambitiouz’ and try to garner an even higher price from either Google Inc (NASDAQ:GOOG) or Facebook Inc (NASDAQ:FB) before this war is over.
“I Get Around”
There are plenty of reasons Facebook Inc (NASDAQ:FB) would want what Waze has. Numerous articles have covered the idea that Waze could expand Facebook’s mobile presence, more closely integrate mapping with Facebook Inc (NASDAQ:FB) on mobile, add another mobile revenue stream, and so on.
Those are all true, but Facebook Inc (NASDAQ:FB) would benefit from acquiring Waze for the simple fact that, like 2Pac, I get around. Most other people do to.
If Facebook had data on my regular commutes, it could better target local advertisements for businesses located along those commutes. Those advertisements don’t need to be in Waze either. They can be on any of Facebook’s platforms.