Google buys mapping app for $1bn The spate of expensive acquisitions of young consumer internet companies with little or no revenue was extended on Tuesday as Google agreed to pay $1bn for Waze, a fast-growing traffic and mapping app for smartphones that has also been the subject of rival takeover approaches in recent months. The purchase robs rivals like Apple and Facebook of the chance to buy a service that would have boosted their own efforts to catch up with Google in internet maps, while also giving Google a badly needed leg-up in the field of services with a strong social component, according to industry and financial analysts. Waze claims around 15m active users among drivers, who contribute information about routes and traffic conditions simply by opening a free app that automatically sends back data to the service. Users can also alert other nearby drivers about accidents, slower lanes and police speeding traps. No terms were disclosed but two people familiar with the deal said that Google paid around $1bn for the company, which was founded in Israel in 2008. It had raised a total of $67m in funding from investors including Kleiner Perkins Caufield & Byers and Li Ka-shing's Horizons Ventures. The deal will be paid for out Google's large cash holdings outside the US, adding to its attractions since the money could not be repatriated without facing a tax hit. Though Waze has only recent started adding advertising to its maps, for instance for fast-food restaurants trying to attract the attention of drivers, it promises to cement Google's lead in interactive maps and extend its appeal as a source of location-based advertising, according to analysts. "The more contextual information Google can provide to advertisers, the richer the leads and the more advertisers will be willing to pay," said Charles Golvin, an analyst at Forrester Research. He added that the strong social component to the service was even more important for Google than the extra location-based information it would be able to tap, helping to boost the attractions of its Google Plus network. The purchase follows Yahoo's recent $1.1bn acquisition of microblogging service Tumblr and Facebook's deal for photo app Instagram, worth $1bn when it was announced last year. The Waze product development team will remain in Israel and "operate separately for now," Google's vice-president of geo services, Brian McClendon, said in a blogpost announcing the deal. Although Waze has an office in California, employees" reluctance to move to Silicon Valley was said to be a factor in a mooted deal with Facebook falling apart, according to earlier reports. Apple, which had also been linked with Waze after its struggles with its Maps application, has denied that it ever made an offer for the start-up. Explaining why he decided to sell the company, Waze chief executive Noam Bardin said in a blogpost: "Choosing the path of an IPO often shifts attention to bankers, lawyers and the happiness of Wall Street, and we decided we'd rather spend our time with you, the Waze community."