Waze adding value to Google maps

Googles purchase of the navigational app Waze, was taken by many  as a defensive move against Apple and Facebook. However, that seems not to be the case with the Israeli-based company which according to Google officials has great potential to revolutionize Google maps service and add to it more of real-time feel for almost no additional investment.

If that proves to be true, Googles costs of $1 billion on the purchase looks well argued. Waze is one of four major companies to have established its own maps of the world, others being TomTom, Navteq and Google. While the tech giant is vastly funding its Google maps vehicles to make tours around the world, spending more than $15 billion for a Street View feature, Waze is relying primarily on its users to do it for them. By collecting GPS data, the navigational app company could track not only the movement of its users, but also receive information about their intent.

Another feature Waze might contribute to Google maps is understanding of users intentions and interest while on the road. This is critical for targeting ads. Wazes CEO stated he is focused on providing useful apps. He said for Forbes “The app has to be open for a different reason. Now that I know where you drive, I can begin offering you deals, I can begin enhancing the experience… If the goal is monetization, it doesn’t work.” Wazes add service approach tries to be more purpose oriented rather than monetary.

Bottom line Waze most likely is going to prove good investment for Google for couple of reasons. Company has a stable user engagement (including more than 50 million users), the app platform offers features Google maps lacks, successful advertising strategies and also keeping the company away from competitors such as Apple and Facebook.

Google shares are up 0.58% today following a jump in all US benchmark indexes. Year to date share price increase for the company is 23.98%.