Reports: Facebook Is Buying Social Mapping/Traffic App Waze For Up To $1B To Court Mobile Users

Facebook appears to be close to making another billion-dollar acquisition to once again ramp up its mobile efforts: according to three reports in the Israeli press at Calcalist and sister publication Ynet and The Marker (all in Hebrew), Facebook has approached Waze, the social mapping and traffic app maker, and is now in advanced due dilligence on a deal that Calcalist puts at between $800 million and $1 billion. The negotiations between the social network and crowdsourced mapping app apparently began six months ago.

We have been digging too and have picked up confirmation from a source that both sides have privately confirmed that the deal is happening, and that the pricing reported first by the Calcalist is accurate. The main issue right now, the source said, is whether to keep Waze in Israel or take it to the U.S., as Facebook did with two previous Israel acqusitions. Those were of feature phone interface developer Snaptu (bought for up to $70 million in March 2011) and facial recognition specialist (bought in June 2012 for $50-60 million).

But! Facebook and Waze have already come back to us with flat non-responses. “We do not comment on rumors or speculation about the business,” a spokesperson at Waze told TechCrunch. The company tells me that it currently has over 47 million active users — more than double what it had in July last year when it reported 20 million.

“We won’t comment on speculation,” a Facebook spokesperson said.

However, if the rumors are true, adding Waze to Facebook makes a lot of sense in some respects: Facebook has been putting a lot of effort into its mobile business, which now has 751 million monthly active users as of March 31, 2013, an increase of 54% year-over-year. That puts mobile on a faster track at the moment than Facebook’s desktop business, which currently has 1.11 billion MAUs, an increase of 23% year-over-year.

The most recent of its movements on mobile services is Facebook Home, an Android-based launcher that lets a user embed a connection into their Facebook social graph across their entire mobile experience with services like the ever-present Chat Heads. On another track, Facebook has for years now been building up a business around location-based check-ins, which also include local deals. A service like Waze, with social networking and crowdsourcing of information part of its DNA, fits perfectly into that landscape.

This would not be Facebook’s first 10-figure acquisition in the mobile space. Just over one year ago, leading up to its IPO, Facebook bought Instagram for $1 billion, a deal that had a large portion in stock and ended up being worth more like $747 million when it finally got approved. That, too, gave Facebook a big leap into mobile services: while Instagram these days also has a handy way of viewing profiles on the desktop web, at its heart it is a wildly popular mobile app that for many works as a social network in its own right.

Nor would this be the first time that Waze has been in the crosshairs of acquisition rumors. One deal that was hotly reported by many, including us, involved Apple buying the mapping company. Of course that ended up not happening, although the two clearly were talking a lot because Waze ended up being a significant part of Apple Maps. The startup has raised $67 million in VC funding from backers including Kleiner Perkins, BlueRun Ventures, Magma Venture Partners, Vertex Venture Capital, and Li Ka-shing.

Facebook earlier this year reported that it passed 1 billion users, and it’s likely that the next billion will not be in the U.S. Waze has around one-third of its users in the U.S. with the rest worldwide. Facebook’s past acquisition of another Israeli startup, Snaptu, which develops services for feature phones, was another deal that helped the social network tackle the burgeoning population of mobile users in developing markets; Waze, however, would help the company take aim specifically at smartphone users.

While Waze’s R&D is in Israel, its U.S. offices, and its CEO Noam Bardin, are based in (Facebook’s old haunt) Palo Alto, where the firm recently redecorated its front window.

Photo credit: Julie Mossler
H/T: Hillel Fuld