Facebook Pursues $1 Billion App Deal
Facebook Inc. is in advanced talks to acquire Waze, a navigation app for mobile devices with detailed mapping information that uses data submitted by other users about traffic and accidents, in a deal that could be worth as much as $1 billion, according to people with knowledge of the matter.
While the discussions characterized as serious, be cautioned that a deal may still fall apart.
Waze, which has close to 50 million users, offers driving directions based on input from other members, such as tips on traffic jams or car accidents. It also functions as a social network, as users can leave messages for other drivers, exchange comments on posts and coordinate their drives with friends. The app is free and Waze generates revenue by selling advertising.
For Facebook, Waze represents an opportunity to expand its mobile expertise and acquire a valuable asset in the mapping space.
The talks come as Facebook tries to coax its users to spend more time on its mobile applications, where it can serve more mobile ads. As Facebook nears the one-year anniversary of its May 2012 initial public offering, the company has been working to beef up its mobile offerings as users have migrated increasingly to its service on mobile devices.
If Facebook acquires Waze, the transaction would represent one of the Menlo Park, Calif., social network’s largest acquisitions. Last year, Facebook purchased Instagram, the mobile photo-sharing app, in a cash-and-stock deal that was ultimately valued at more than $700 million. Facebook has since acquired other mobile-centric startups such as Parse, a service that helps companies build mobile applications.
Waze, which is especially popular in dense cities, would place Facebook at the center of people’s cars and could be used to cull more real-time data based on users’ behavior.
It would also provide a key channel for serving location-based ads from nearby businesses. For instance, restaurants or department stores nearby could serve ads for limited-time deals to Waze users who are passing by.
Over the past year, Facebook and Waze have grown closer. Last fall, Waze announced an integration with Facebook to allow users to log in to the app through their Facebook account. Waze Chief Executive Noam Bardin is friends with Josh Williams, the former chief of location-based social network Gowalla—acquired by Facebook—who now leads Facebook’s local-services efforts.
On his Facebook page, Waze’s Mr. Bardin recently praised Facebook’s Home, the social network’s new Android application, and posted a promotional photo of the application that prominently displays the Waze app icon on a smartphone screen.
Source: WSJ
