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Facebook Negotiating to Buy Israel’s Waze for $1 Billion

Could Waze become the next Instagram?

By: David Shear
Published: May 9th, 2013 in Business » Israel

Facebook is in advanced negotiations to buy Israeli navigation company Waze for between $800 million to $1 billion.

The two companies started talking six months ago, at a price of $200 million to $300 million, significantly less than where the price is today. During that period, Waze has turned down several offers, including $500 million from Apple.

Waze, a turn-by-turn GPS app uses the public to provide them real-time information about road conditions. The app claims 44 million users as of April 2013.

The holdup in the negotiations has been the insistence by the Israeli company to remain in Israel. Facebook currently doesn’t have a development center in Israel, but Facebook has reportedly agreed to allow Waze to continue operating in Israel as an independent company under its own brand name.

Acquiring Waze would be an interesting purchase for Facebook. Unlike Instagram, which Facebook bought for $1 billion in April 2012, Waze doesn’t seem to fall within their core competency, so it will be interesting to see how Facebook integrates Waze into their platform, or how they decide to enter the GPS space.

Waze would be Facebook’s third Israeli acquisition, following the purchase of Snaptu in March 2011 for $70 million and Face.com in June 2012 for $60 million.

So the real question is, why doesn’t Facebook have a development center in Israel?

Related articles: Facebook, Waze, Israel, Social Media, Instagram
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