Google’s Acquisition of Waze: A Triad of Benefits

Most analysts have hailed Google’s recent acquisition of Waze for $ 1.3 billion a masterstroke (a minority thinks that this is going to be a botched overstretch, a la Motorola). [See some nice reports here, here and here and the Waze blog announcement here.] However, there seems to be no agreement on whether this is a strategic M&A, a pure technology acquisition or an acqui-hire. Different folks have differing opinions; IMHO, this acquisition offers Google a few advantages of each of these.

Waze navigatiescherm

Waze navigatiescherm (Photo credit: Henk-Jan van der Klis)

A Pre-emptive strategic move: It was reported that there were several suitors for Waze, including Facebook and Apple. By spending a small part of its $50 billion plus cash pile, Google has managed to keep a key technological advancement out of the hands of the competition and this been able to maintain its pre-eminent position in the Maps market.

A technology acquisition: By definition, a technology acquisition provides the acquiring firm with a technology or technological knowhow. Waze will enable Google to add a critical element to its Maps technology – real-time, crowdsourced updates. A weakness of all the major players in the Maps market has been the need to spend millions of dollars to periodically update the maps for accuracy in a rapidly changing world (cue the Apple Maps disaster). Waze will augment Google’s efforts by providing a cheaper option for map updates as well potential future monetization through location based advertising.

An acqui-hire: While the technology artefact represented by Waze is impressive indeed, Google will also benefit from the knowledge residing within the employees of Waze. Google has committed to maintaining the Waze R&D team in an ‘as is’, independent state, thus ensuring continuity of tacit forms of individual and group level knowledge. This will maximize the potential innovation outcomes from the Waze R&D team, and Google will be able to benefit from potential knowledge spillovers to its own R&D centres (some of which are located relatively nearby). [It is reported that Waze employees have been offered nice retention bonuses to stay for 4-5 year post-acquisition, thus maximizing the time for spillovers, knowledge transfer, and innovation.]

Overall, the Waze acquisition provides Google with several benefits which will enable it to possibly dominate the ‘Lo’ portion of the next big battlefield – The SoMoLo Convergence.

The Google Cultural Institute

Google’s home page has a link to the Google Cultural Institute – a wonderful repository of 20th century history. This impressive initiative by Google, which “helps preserve and promote culture online”, is in line with Google’s mission to”organize the world’s information and make it universally accessible and useful.” Talk about strategic alignment!

 

Harry Potter ebook model a success?

Pottermore‘s experiment of bypassing the distributors seems to a be a success.

Is this a peek into the future, where successful authors (or their publishers) will bypass platform owners (Amazon, Apple, and others) and directly offer e-versions of their top sellers to customers?

British versions of the Harry Potter series My...

Image via Wikipedia

Despite the wide availability of pirated copies, the ebook versions of the books have been widely successful.

During an interview with Radio Litopia’s “The Naked Book” Wednesday afternoon, Redmayne said Pottermore sold more than $1.5 million worth of Harry Potter books in the store’s first three days online.

via Pottermore Sells $1.5 Million Worth of Harry Potter E-Books in 3 Days – John Paczkowski – Media – AllThingsD.

What is to be seen is if JK Rowling will follow a similar strategy for the sales of her new novel. Though ebook prices have been announced, it is still not clear if the publisher of this book will bypass the Amazon, Google and Apple platforms. A Kindle version is currently available for pre-purchase, but eventually, this link might forward buyers to the publisher’s website.

The Casual Vacancy

480 pages (approximately)

ISBN  9781408704202   (hardback) price £20.00

ISBN  9781405519229   (ebook) price £11.99

ISBN  9781405519212   (audio download) £20.00

ISBN  9781405519205   (CD) price £30.00

via THE CASUAL VACANCY – Little, Brown Book Group.

Free 3G connection with Android phones sold in India

Reliance Communications, India‘s second largest telecom operator, has announced that all Android smartphones sold in India for the next two years, will come with a free bundled 3G connection (albeit, with a 1GB limited download capacity). This marks the first major competitive move by a telco in this fast growing market segment, to grab market share by providing free connections. This will help moving consumers from the slower and cheaper 2G data connections (which cost 2$ a month for 2.5 gb) to the more pricier 3G connections (which cost $15 a month for 3 gb).

Android currently rules in India’s small, but fast growing smartphone segment. With its large installed base of cellphone subscribers, it offers a huge market opportunity, which Google seems determined to tap.

Image via Economic Times

 

RCOM and Google have entered into a two-year deal according to which all Google-endorsed android mobile devices from companies like Samsung, HTC, Sony Ericsson and LG will come with the telco’s third generation, or 3G, mobile connection with 1 GB of free downloads for the first six months.

 

Read more at Google-endorsed Android smartphone will come bundled with a Reliance Communications connection – The Economic Times.