After numerous rumors came out suggesting that Google had spent more than $1 billion on Israel-based GPS firm Waze, they have released the official acquisition deal. According to Google's filing with the U.S. Securities and Exchange Commission, $966 million was spent on the company.
Google's quarterly financial report also revealed that $847 million of the deal was on good will, with the rest coming from $188 million in intangible assets and $69 million in liabilities.
Along with purchasing Waze, Google announced that during the quarter it had purchased 15 other companies costing $344 million, bringing the total cost of acquisitions for the quarter to $1.31 billion.
Google's Navigation Future
One of the largest components of Google in the next decade may be its self-driving cars, especially if they become popular. Navigation applications that have a following and are well developed such as Waze will be crucial for Google as it tries to perfect a self-driving car that relies on navigation information.
As states begin to consider automated cars as being safer than a regular driver, they will want to make sure that they can navigate themselves correctly before allowing them on the road. Although the driverless cars use close-range communication to navigate along a road and avoid crashing, their macro transportation is still entirely driven by GPS.
Earlier this month, analyst Gene Munster announced that Google and driverless car makers will be able to profit off these automobiles before the end of the decade. Although Google will likely not make many cars itself, all of the hardware and software licenses, which could easily incorporate Waze, will be licensed to car companies.
The automated car industry is expected to be worth $200 billion, and if Google's navigation software for driverless cars is the best money can buy, then the company will be the major beneficiary when these cars begin to go on the market. As analyst Jeff Kagan states, "It will be years before we know whether it was worth it or not."