On Tuesday, Google announced its acquisition of social mapping startup Waze. This move came as a surprise to industry pundits, many of whom suspected that Facebook was the leader among prospective buyers.
Waze is an Israeli startup that derives the majority of its content from crowdsourcing. The app provides directions that are complemented by real-time reports regarding traffic, road hazards and speed traps. The app works by actively tracking users via their phones’ GPS systems, which then update the app continuously when the user is traveling. Users also have the option to log anything that they think may slow the flow of traffic.
The app currently has roughly 50 million users, a third of which use the app each month to get directions. Google is planning to tap into this market by using several features from Waze to augment its Maps service, the most likely of which would be the adoption of Waze’s real-time traffic reports.
Not only does this acquisition allow Google to improve one of its pre-existing products, but it also may represent a defensive business maneuver. Most people believed that Facebook would be the company that would eventually snap up Waze. Industry pundits have suggested that Google shelled out $1.3 billion for Waze not only because it saw the potential to improve its own services, but because it also saw the potential benefits that could be reaped by its competitors.
Admittedly, this development does follow Google’s recent emphasis on crowdsourcing consumer experiences. Google recently invested heavily in peer-to-peer lending service Lending Club and has also invested in many smaller companies that rely heavily on user-generated data for their products.
Crowdsourcing of information will become ever more crucial as map apps continue to evolve to include constantly updated live data and new functions like business reviews. As mobile traffic continues to increase, accurate mapping services are becoming much more important. Now that phones are relied on for their GPS capabilities and media functions as much as their communications capabilities, companies like Google must continue to innovate in order to remain on pace with the rest of the industry. Whether this is a defensive play on the part of Google or simply a strategic business acquisition design to augment an existing product, it will serve to keep Google at the forefront of the mobile industry for the immediate future.
[Source: Forbes]
