Mazal Tov! Google and Waze officially tie the knot
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Google and Waze seal the deal on their $1.1B purchase acquisition.

waze-money6:30PM Jerusalem time, 8:30AM Mountain View CA – Google and Waze officially seal the deal on their $1.1B purchase acquisition.

On the official Google blog , Brian McLendon, vice president in charge of the Google mapping service, wrote a piece regarding Google’s purchase of the Israeli start-up, Waze. The final amount of the transaction stands at $1.1B, of which $1.03B will be transferred in cash directly to the company and its stockholders. An additional $100M will be awarded to employees based on performance. As part of the transaction, Waze’s development center in Israel will be given a minimum period of three years with which they will remain open, and nearly all workers shall remain employed at the development center in Israel during this time.

The recent announcement ends the rumors, so commonplace in recent months, of billion dollar purchase deals by other tech giants. The latest manifestation of which, involved Facebook’s offer to buy the company for $1b. According to reports, the deal ran aground due to the founders insistence on keeping the development center in Israel.

In an official announcement to Waze users in their company blog, CEO Noam Bardin, explained why the company chose to sell rather than remain independent. “We asked ourselves whether Waze will remain a fun project to work on as a public company? We thought of the time we would spend dealing with bankers, lawyers and shareholders, and we prefer to spend our time with you; the loyal users of the Waze. Google has committed to providing us with the independence required for us to reach our goals, and the resources we need to succeed. We believe that Google is the best partner to attach a map editor to, as well as our regional managers, executives, and 50 million users. “

The acquisition process is expected to be completed during the next two months, after the company finishes with various due diligence processes and acquires all the necessary permits from the American authorities. Due diligence is considered to be a formality in deals of this size without much expected by way of surprises, given that both parties have probably been inspecting each others laundry for months now (with and without the others knowledge). However, you really can’t be too careful when you’re playing with 10 figures.

Questions abound as to how the search giant will find a way to justify the massive price tag for a company, who’s business model has not a chance in a morning traffic nightmare, to ever come close to revenues in that vicinity. Just to give you an idea of the discrepancy we’re talking about here; Waze has been around since 2007, they have 50 million users, and estimated earnings for this past year sat at only a few million dollars.

Some people point to the ability to location-target users with real-time relevant ads, as a winning recipe for success. Many would argue though, that location targeting is an industry in its infancy, and it’s still way to early to valuate it properly. Certainly a billion dollars too early. Others site a ‘whole is greater than the sum of its parts’ theory, seeing the absorption of Waze’s tracking technology into the information nebulous that is Google, as adding to the overarching mission of the company to become information omniscient. If this is true, then any tool able to add meaningfully to such an imperious goal would be something you couldn’t, in all evil conscience, put an actual price on.

Still others believe this was just a way of keeping Waze out of the clutches of Facebook. It’s difficult to imagine a professional company spending a billion dollars on such a childish objective – although, this is the company that uses a slide at their offices to get down from the mezzanine.

 

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Avi Schneider

About Avi Schneider


Global editor and writer for Geektime, author of the book ‘How To Fight For Your Goals: Social Combat Theory’ and the SocialCombatMedia.wordpress blog, founder of Cluboom and former senior writer for Blonde 2.0. Schneider is an orthodox Jew, husband, father, martial artist, writer, speaker – overall Jack of all trades and a master of jack (but working on it).

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