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The Real Reason Google Spent $1B to Acquire Waze


Google and Waze: perfect together

Introduction

According to their website, Waze is “the world’s fastest-growing community-based traffic and navigation app.” In June 2013, Google acquired Waze for $1B. One might speculate that the acquisition was based around:

  1. The navigation app.
  2. The potential to integrate the technology into Google Maps.
  3. Bringing social networking to navigation.
  4. The loyal following of the user base.

These items don’t add up to one billion dollars, however. Here’s my take on the acquisition:

Google’s acquisition of Waze is an investment (and bet) on where technology is headed.

In other words, Waze fits into Google’s product vision.

A Personal Story

I was driving home from Lake Tahoe with friends. We wanted to stop for dinner. Spread across three cars, we decided to meet directly at the restaurant. I had never been to this particular restaurant, so I entered the address into Waze.

My friends had been to the restaurant, so they were not using navigation. A major traffic jam developed on Interstate 80. Meanwhile, Waze routed me around the jam by taking me towards Sacramento, directing me down Highway 5, then connecting back to Interstate 80.

Life is good. Traffic is not.

Photo credit: Flickr user epSos.de via photopin cc

I bypassed the entire traffic jam and arrived at the restaurant 45 minutes before my friends. They had to sit in stop-and-go traffic for 45 minutes. I got to avoid it. For this particular moment, Waze improved my quality of life.

Waze has intelligently re-routed me a few more times since then. Often, the re-routing occurs before you even see the onset of traffic. Waze notifies you of the route change and lists the estimated amount of time you’ll save on the new route. It’s amazing.

How Waze Relates to Google’s Future

Recall Google’s mission:

To organize the world’s information and make it universally accessible and useful.

This is precisely where Waze comes into play.

Organizing the world's data

In Web 1.0, the world’s information was published online via the World Wide Web. Some ten years later, Web 2.0 emerged, in which web content was supplemented by user generated content.

Today, we’re starting to evolve into Web 3.0: user and machine-generated data.

And that’s what Waze is all about. As you drive, you generate data (accident reports, traffic reports, validation of accident reports) and your phone generates data by way of the “machine” (your car) it’s traveling in (direction, route and speed).

The value in Waze is its ability to organize this information and make it accessible and useful to its users.

Google acquired Waze for its real-time, back-end tracking system that intelligently manages data flows from millions of simultaneous users (and makes sense out of that data).

In other words, it organizes the (driving) world’s information and makes it universally accessible and useful. This sophisticated and intelligent data management system can be applied to many other use cases beyond navigation.

The Future of Organizing Data

To date, Google has been wildly successful at organizing the web’s information. Going forward, they’ll look to extend beyond the web to any entity that emits data (e.g. devices, people, etc.). And the $1B “bet” on Waze fits this vision. Let’s consider how this relates to navigation:

The evolution of navigation

In Navigation 1.0, the GPS system got you to your destination. With apps like Waze, you get there quicker. Next, “organizing data” will help us find interesting stops (along the way to our destination) and help us build better highways.

Where might Google venture from here? The first one is quite obvious:

  1. Driverless cars.
  2. Healthcare.
  3. Smart homes.
  4. Local or national government.
  5. Sporting events.

[Related article: A Self-Driving Car Will Create 1 Gigabyte of Data Per Second]

Imagine a “Waze-like app” inside each driverless car. As the driverless cars drive, they’ll generate the same sort of data that Waze users do today and receive similar benefits (e.g. where to turn, where to park, where to go when the gas is low, etc.).

Conclusion

Ever sit in traffic for an hour? It’s so frustrating. It’s not just wasted time, it’s also the stop-and-go activity of driving that wears you out. Waze can help me avoid the traffic and give me back an hour of my day. That’s a quality of life improvement.

To date, Google organized data to help me find information on the web. Going forward, they’ll organize data to help improve quality of life.

Commentary from the Community

I invited Twitter users to chime in with their opinions on why Google acquired Waze. Here’s what they tweeted.

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One Response to The Real Reason Google Spent $1B to Acquire Waze

  1. […] apps that could either disrupt or improve on today’s systems? Or tie in Google’s recent billion-dollar acquisition of a congestion-busting consumer application called […]

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