Douglas MacMillan, Brian Womack and Ari Levy San Francisco
GOOGLE was considering buying map software provider Waze, setting up a possible bidding war with Facebook, people familiar with the matter said on Friday.
Waze was fielding expressions of interest from multiple parties and was seeking more than $1 billion (R9.5bn), one of the people said. They asked not to be identified because the talks are private.
As consumers gravitate towards 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.
Facebook had held talks to buy Waze for as much as $1bn, two people familiar with the matter said earlier this month.
Google and other large technology companies had approached Waze about a possible deal since the Facebook talks became public, the people said.
None of the bidders was close to clinching a deal and the talks might fall apart, they added. 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 eliminate a competitive threat and keep the start-up out of the hands of another firm, Opus Research analyst Greg Sterling said.
“If they put a lot of effort behind it and really try to develop a social mapping product, it could be something significantly differentiated from what Google is offering and could grow into a competitor for Google Maps,” he said.
Apple, which distributes a competing mapping tool, is not part of the discussions.
While a Google purchase of Waze might not be blocked by US regulators for its potential to alter the competitive landscape, it could still end up being scrutinised, former antitrust attorney for the Justice Department in Washington, Allen Grunes, said.
Incorporating Waze technology into Google Maps might “complement a product they already have and make it better, as opposed to representing a leading product they already compete with”, Grunes said. The transaction “could get looked at anyway by regulators because if Google gets it, it’s quite possible Facebook will be in there complaining, even if there isn’t a real antitrust problem.” – Bloomberg