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Facebook in advanced talks to buy Israel Startup Waze
All, Company News, Facebook, Mergers and Acquisitions, Middle East, North America, Social Media, Start Ups and Innovations
Facebook Inc. (Nasdaq: FB) is in advanced talks to buy Israeli navigation and traffic congestion app company Waze Ltd. The price tag has not been confirmed, though sources are pegging it to anything between $800 million and a billion dollars.
This is the second time talks of Waze acquisition by Facebook are taking place. In late August 2012, there were reports that Facebook was in talks to acquire Waze, and the company's executive met with Facebook representatives in Israel, but no deal emerged from the talks.
Waze has developed a popular navigation app on the market that can be used by smartphones, tablets, and vehicle systems, providing GPS navigation, crowdsourced-based updates about congestion, police, traffic cameras, accidents, and road hazards. The company has more than 34 million subscribers, and expects to reach 70 million by the end of the year.
Founded in 2009, Waze raised $30 million in October 2012 from Li Ka-Shing's Horizons Ventures, Kleiner Perkins Caufield & Byers, and Ifund. The company has raised $67 million to date. Other investors include BlueRun Ventures, Qualcomm Ventures, Microsoft Corporation (Nasdaq: MSFT), Magma Venture Partners, and Vertex Venture Capital.
In January, there were reports circulating that Waze was in talks with Apple Inc. for a $400 million buyout, but no deal materialized.
This will be Facebook's third acquisition in Israel if the deal goes through. Other acquisition in Israel includes a facial recognition company Face.com in 2012 for $60 million, and mobile app company Snaptu for $70 million in 2011. In both cases, the companies were closed down in Israel with the senior executives going to work for Facebook in California. But Waze is not worried about that. When asked whether Facebook would close the company, as it has done with its previous acquisitions, Waze replied, "Don't worry, we'll be all right."
By partnering with Facebook, Waze is likely to get more exposure, since at the moment not much is known of the app outside Israel and the U.S. On the other hand, Waze offers Facebook the chance of contacting friends when they are in cars. Facebook will be able to offer advertising to friends based on their driving patterns, even before they leave home, and not just based on content. Facebook could enable friends to share information while in cars, by both text and voice, about their driving experience.
Written by Regina Timothy
Editor of TechNews Report. Loves all things technology
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