Rumor: Apple May Buy Crowdsourced Mapping App Waze

Is Apple considering buying Waze? That’s what TechCrunch is saying by way of the rumor mill.

If you don’t already know, Waze is a crowd-sourced mapping and traffic app. But it’s also a social community; it’s not that far removed from Foursquare. That’s what makes any potential acquisition here really interesting.

There are many local data providers or vendors that could help improve Apple’s local database of places. But if it were to acquire Waze, which has a strong international following as well, it would get a social network and not merely a database.

If you squint a little an Apple acquisition of Waze is a little like Google’s acquisition of Zagat — an important content deal that puts the company in a slightly different business. Apple tried and failed to enter social networking with Ping (for iTunes). However Waze meets a compelling need for Apple in a way that Ping did not.

It has been clear since Apple Maps formally launched this fall there was going to be another local-mapping acquisition or potentially multiple acquisitions given the some of the documented data problems and harsh reaction of many critics. Apple needs help and greatly underestimated how messy and complex this local-mapping business turns out to be.

There have been rumors of Apple looking at Foursquare or potentially integrating the company’s data into Apple Maps. Now that Apple has taken the plunge into local waters it’s starting to see what’s required before it can really swim.

If Apple were to acquire Waze it would probably get about 2-3 years out of the company’s key personnel before they left for other startups. In that time a lot could be accomplished. But what is most intriguing is the social/community angle.

Would Apple simply be using the traffic and navigation data or would it seek to do more and further develop Waze and its community in ways that are consistent with the social-media vision of the founders?

Postscript: The deal isn’t happening according to multiple reports. CNET is saying that the initial rumor reported by TechCrunch was “fabricated.”

Perhaps it was an effort by funders or people otherwise close to Waze to generate buzz and potential acquisition offers from Apple competitors. TechCrunch has been used in the past by investors, particularly VCs, to try and influence acquisitions or generate competitive bidding.

Postscript (round two): Apparently there was some discussion between the parties about an acquisition but the valuation of the company was in dispute. Waze wanted more than Apple was (right now) willing to pay. According to TNW:

While it has been reported that Waze was holding out for $750 million, multiple sources have told us that the company was valued around $200 million in its last funding round, and current investors were aiming for a higher price, somewhere nearing $1 billion.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.