As the battle between Google and Apple spilled into the mapping scene (no pun intended), a handful of international startups have emerged as clear winners: Waze, Locationary and Hopstop were acquired by the tech giants to enhance their mapping services.
Google Acquires Waze:
In late June, Google announced the acquisition of Waze. Although the startup was making less than USD 70 million in revenues, the deal was investigated by the FTC. Our friend Micah Berman from FindTheBest.com weighed in with some scenarios on how Google will integrate Waze into their ecosystem:
The acquisition of Waze, an Israel-based social mapping startup, has turned many heads as this purchase came out of nowhere. There has been speculation that this acquisition has been made simply to keep the technology out of other hands. The main suitor for Waze was Facebook, and Google was going to do everything it could in order to avoid a Facebook mapping competitor. The real question now becomes, are the reports true? Does this acquisition mean a new product is coming? Is Google about to use Waze’s social mapping to enhance their already existing Google Maps? Only time will tell, but I will attempt to speculate what will happen if indeed Google intends to use Waze as part of a new product: Google Glass.
If Google implements this technology as part of Google Glass, it’s almost like a digital camera that allows you to take pictures while also communicating with your social network, adding another layer to location based social networking (it may also cause car insurance quotes to skyrocket due to distraction!). Seriously though, this would take Google Glass over the top as it simply seems too good to be true. What is more likely to happen is the implementation of Waze within the already existing Google Maps.
Apple acquires Locationary and Hopstop
Apple was also rumored to be strongly in the running for Waze at the time. Less than a month later, it was announced that they acquired not one, but two, mapping related startups.
Apple’s plans in this case are fairly obvious: Beef up its new mapping service. The troubled launch of Apple’s home-brewed mapping software last year sparked a world-wide consumer backlash capped by a rare apology from CEO Tim Cook. Since that time, Apple has been working hard behind the scenes to improve the service. “We’re putting all of our energy into making it right,” Cook said last December.
And this acquisition will undoubtedly figure prominently in that effort. Locationary is a sort of Wikipedia for local business listings. It uses crowdsourcing and a federated data exchange platform called Saturn to collect, merge and continuously verify a massive database of information on local businesses and points of interest around the world, solving one of location’s biggest problems: Out-of-date information.
John also co-authored a post with Liz Gannes on the acquisition of New York-based HopStop:
HopStop’s area of cartographic expertise: Mass transit directions, something Apple’s mapping service doesn’t currently offer.
“Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans,” Apple spokeswoman Kristin Huguet said, confirming the acquisition with Cupertino’s standard boilerplate.
At last count, HopStop had two million monthly active users and launched a Waze-like service for reporting real-time delays and other information.
Why Does This Matter:
From an entrepreneurial perspective, an important takeaway from these acquisitions is that building a company to be acquired can work. The aforementioned mapping services were never going to be publicly traded, so the founders focused on building a great product that might prove to be an acquisition target by a bigger company, and it worked.
From the perspective of Google and Apple, Micah sums it up nicely:
Apple and Google are two of the biggest innovators in the tech world buy they remain on different sides of the market. They compete on many fronts, including media content and smart-watches, There is a slight “backlash” against Apple as a company, and upon the passing of Steve Jobs it has appeared to lose its innovative touch. Time will tell which of these deals will prove more successful, but we know Apple cannot afford another product flop and Google needs to continue to ride its way to the top.