The Real Reason Google Wants Waze: Your Data
After months of negotiations, it looks like Google will finally be purchasing Waze, the Israeli social mapping site, for a reported $1 billion.
In case you're not familiar with the company, Waze is similar to Google Maps, only it uses route suggestions from users to inform other users on the quickest and most efficient way to get from Point A to Point B. In a way, it's the crowdsourced answer to Google's current version of Maps.
When news of the deal broke, a few balked at the price tag, chalking up the 10-digit sum to a bidding war that escalated between Facebook; or just another acquisition in a frothy start-up market.
But besides the high price tag, the armchair analysis behind the deal tended to focus on a couple of points: That Google was intimidated by Waze, or, as some suggested, buying Waze would keep the company out of the hands of Apple or Facebook, who are each beginning to build out their own map products.
The content that you submit is neither private nor confidential and you should not have any expectation of privacy with respect to it...When you use your mobile device with a copy of the Application installed, Waze collects your location and route information. Waze uses that information to provide you and other users with the Services. Waze may make further use of your location and route information by providing you information about sites, shops and other places and attractions in your close vicinity.
There's definitely some logic to the idea that Google wants to enhance its map experience by integrating user-supplied information. But that's not worth $1 billion.
For example, Waze may record the frequency and scope of your use of the Services, the duration of your sessions, the web pages that you visit, information that you read, content that you use or create, advertisements that you view or click on, your communications with other users and third parties, the Internet protocol (IP) address and the name of the domain that serve you to access the Services, and the geographic location of the computer system that you are using to log-in. Such data is usually automatically collected and stored in log files of the Services' computer servers.
There's a reason Waze is a free download on iOS and Android, and there's a reason Google paid $1 billion to acquire the company: Your location data is extremely valuable to Google.
This isn't news. Back in 2011, Google execs were e-maling back and forth about the value of user location data, strategizing on how to grow the mound of information the company could collect around customers' real-life interactions. "I cannot stress enough how important Google's Wi-Fi location database is to our Android and mobile-product strategy," Google's product manager wrote at the time. In 2012, McKinsey reported that the market for personal location data would reach $600 billion by 2020.
Frankly, if anyone's concerned here, it's not Apple or Facebook. It's Foursquare--the company that's desperately trying to mold itself as the "location layer for the Internet."
With this acquisition, Google takes one step closer to establishing itself as the de facto layer of location on the Web. For a company with about $50 billion in cash reserves, that's a title worth owning.