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Thursday, May 30, 2013

Oh my: Waze gives up $1 billion to stay in Israel

Facebook is no longer in talks to buy Waze, Mike Isaac at All Things D reports.

The two companies couldn't reach an agreement because Waze wanted to stay in Israel, while Facebook wanted the company to relocate to California, says Isaac.
 
But the talks dissolved in recent days, according to sources, due in part to conflicts over whether or not the Waze team — which is predominantly based in Israel — would move over to the United States and fold itself into Facebook’s Menlo Park, Calif., headquarters, among other reasons.
Reps from both Facebook and Waze declined to comment.
Waze’s mobile application seemed like a logical acquisition target for Facebook, as Waze relies on crowdsourced traffic data, accident reports and police traps from its 40-million-plus userbase to help drivers better navigate their road trips. While competitors Google and Apple both offer mapping services, Facebook currently does not offer any sort of maps app.
And buying a popular mapping service could have been another way for Facebook to push into mobile, complementing the social giant’s widely adopted photo and messaging applications.
Moreover, Waze was built as a social application “from the ground up” — a philosophy Facebook especially espouses — rather than as a mapping application with a social layer slapped atop it. In essence, it fit with Facebook’s vision of a social service. So it wouldn’t be impossible for the two companies to figure out terms that make sense for both sides.
It has been widely speculated that Apple was in talks to acquire Waze, which would also make sense given the company’s missteps with its own mapping app.
Of course, Apple's commitment to Israel is relatively recent too. 

Maybe Google, which has a commitment to Israeli high tech, will buy them even though they want to stay here.  

And for those of you who are high tech entrepreneurs who are thinking of going public, here's a word of advice. Waze is not a public company. While they have done three rounds of investment financing, their private investors are a lot less likely to sue them for not maximizing shareholder value by moving the company to Menlo Park. Think about it. And drop me an email if you're a high tech company and have any questions.

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