Google, maker of the Android operating system, is considering buying map-software provider Waze, setting up a possible bidding war with Facebook, people familiar with the matter said.
Waze is fielding expressions of interest from multiple parties and is seeking more than $1 billion, said one of the people, who asked not to be identified because the talks are private. The Palo Alto, Calif.-based startup might also remain independent, instead seeking to raise a round of venture capital financing, the people said.
As consumers gravitate toward mobile devices away from laptops and desktops, Facebook, Google and other companies are beefing up efforts to court customers on the go. The potential bidding tussle for Waze, which uses information from online communities to improve driving directions, reflects the widening importance of maps on smartphones and other handheld gadgets. Waze, a free service, generates revenue via location-based advertising. Its tools are also available over the Web.
Facebook has held talks to buy Waze for as much as $1 billion, two people familiar with the matter said earlier this month.
Late last year Waze participated in an Ad Age Brand Hack, pitching the Food Network on how it could use the data generated by Waze to help direct people to Food Network-endorsed destinations and help Waze users discover food nearby. Watch the video below.
Google and other large tech companies have approached Waze about a possible deal since the Facebook talks became public, the people said. None of the bidders is close to clinching a deal and the talks may fall apart, they said. Waze may also walk away from the discussions and use more venture backing to expand its mapping program, which has more than 40 million users.
Google has a widely used mapping tool and could adopt Waze's technology to add social features to the software. A takeover would also eliminate a competitive threat and keep the startup out of the hands of another company. Apple, which distributes a competing mapping tool, is not currently part of the discussions, a person with knowledge of the matter said.
Waze's investors include Redmond, Washington-based Microsoft, people said. Waze raised $30 million in 2011 in a funding round led by Kleiner Perkins Caufield & Byers and Hong Kong billionaire Li Ka-shing's Horizons Ventures Hong Kong. Earlier investors include Magma Venture Partners and Vertex Venture Capital in Israel and BlueRun Ventures in Silicon Valley.
Julie Mossler, a spokeswoman for Waze, declined to comment yesterday. Waze announced a partnership with IMS Internet Media Services in April to expand in Latin America. Waze's mobile app alerts users to potential traffic slowdowns or suggests alternative ways to reach destinations. The service also notifies drivers of road work, speed traps other potential hazards, using input from users.
~ Bloomberg News with contributions by Ad Age ~