A few weeks ago, it looked like the courtship between Facebook and Israel-based start-up Waze, maker of a popular navigation app, was on the verge of being consummated in another eight-figure acquisition deal for the world's biggest social network.
Now it seems Mark Zuckerberg has been left at the altar, holding his checkbook as technology and social media rival Google is about to seal the deal for $1.1 billion to $1.3 billion (a bit more than Facebook paid for Instagram).
Wants To Stay In Israel
The Israeli business journal Globes reports that there were two sticking points in the Facebook deal: The payment details -- cash and stock instead of just cash -- and the company's insistence on moving Waze's operations to its Menlo Park, Calif.-headquarters from its current base in Raanana, a suburb of Tel Aviv, where it has 100 employees. The company has a much smaller office in Silicon Valley's Palo Alto.
Google already has a large operation in Israel, going back to 2007, now including an innovation incubator center opened in March 2012.
Waze, founded in 2008 by Uri Levine and Ehud Shabtai and Amir Shinar, claims it has 50 million users who share real-time traffic information via an app that is part social network and part GPS, offering turn-by-turn navigation but learning best routes intuitively from users' driving times. Waze also has the capability to report accidents, speed traps, surveillance cameras and other information.
Waze is available for all the most popular smartphone platforms: Google's Android, Apple's iOS, Nokia's fading Symbian, Microsoft's Windows Mobile and Windows Phone 8 and BlackBerry.
Globes noted that, if the deal is completed, Google could integrate Waze with Google Maps, or leave it alone, as preventing Facebook from acquiring it might be a victory in and of itself.
Technology consultant Rob Enderle of the Enderle Group told us the race to gobble up Waze shows that start-up and app developers understand what consumers want and need better than huge corporations.
Losing Their Way
"The real question is likely, can they retain the talent once they buy the company?" Enderle asked. "The issue for Google, and most companies in this segment including Facebook, is they fundamentally don't get social and have to buy companies that do."
But pointing to a current comedy about Google starring Owen Wilson and Vince Vaughn, "The Internship," which shows the company's efforts to identify the best and brightest innovators, Enderle noted that recruiting the right people and retaining them them are two different things.
"Folks that know both how to do social right and speak to the technology are incredibly valuable," Enderle said. "I'm not even yet sure Google fully understands this well enough to assure these folks don't leave for new start-ups after the acquisition. And that's where I think the problem will be."