Facebook plans to buy navigation app for mobile devices called Waze and the company might pay $1 billion.
Waze has almost 50 million users and it provides driving directions based on information from other members, such as tips on accidents or traffic jams, but is also serves as a social network, allowing its users to leave messages for other drivers, coordinate their drives with friends or exchange comments on posts. As the app is free, Waze gets its profit from selling advertising.
Facebook sees in Waze an opportunity to expand in the mobile segment and purchase a valuable asset in the mapping space. This move is also part of Facebook’s strategy to try to make users spend more time on its mobile applications, because here the company can serve more mobile ads. More and more users begin to migrate to Facebook’s service on mobile devices and the company wants to boost its mobile offerings.
In 2012 Facebook acquired mobile photo-sharing app Instagram, in a deal valued at more than $700 million. Over the time Waze and Facebook have grown closer, as last fall Waze announced a partnership with Facebook to allow users to log in to the app using their Fcaebook account.
Source: The Wall Street Journal