Why Google Wants to Acquire Waze

There are many reports that Google will buy Israeli mobile traffic app Waze for $1.3 billion. This acquisition would allow Google to solidify  its dominant position while actively preventing Apple or Facebook from acquiring the technology.

If you have the number one product or service, one way to keep your customer base is by keeping your competitors out of the game.

Get defensive by blocking your competitor from obtaining the same assets. This is an intentional and legitimate strategy. The best way to fend off competition is either to directly purchase the competitor themselves or to buy a valuable company that your rival is positioned to acquire.

In this case, both Apple and Facebook were rumored to acquire Waze earlier this year.

In January, there were rumors Apple would acquire Waze. Apple had released Apple Maps in September 2012 with disastrous results.  Aquiring Waze would have provided mapping technology Apple lacked.

In March, Facebook was rumored to be in talks to buy Waze for $1 billion. However, that deal fell through after a reported disagreement between the two companies.

With this acquisition, Google also demonstrates the importance of proactive growth. Although Google Maps is the top mapping application Google recognizes that historical performance is no guarantee of future demand. While Google’s acquisition of Waze would not guarantee its top spot in mapping, it does help ensure neither Apple nor Facebook will be taking over any time soon.

*Update: Google confirms it has acquired Waze.

Photo Credit: frontiersofinteraction via Compfight cc

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