Google Confirms Waze Purchase, Development Stays Put

As expected, Google (GOOG) confirmed on Tuesday its purchase of Israeli mobile mapping and navigation developer Waze, an acquisition that positions it squarely in the middle of the hotly competitive user-input mapping segment.

Brian McClendon, Google Geo vice president, acknowledged the transaction in a blog post but didn’t offer any specifics of the deal.

“We’ve all been there: stuck in traffic, frustrated that you chose the wrong route on the drive to work,” he wrote. “But imagine if you could see real-time traffic updates from friends and fellow travelers ahead of you, calling out ‘fender bender … totally stuck in left lane!’ and showing faster routes that others are taking. To help you outsmart traffic, today we’re excited to announce we’ve closed the acquisition of Waze. This fast-growing community of traffic-obsessed drivers is working together to find the best routes from home to work, every day.”

According to an account in AllThingsD, Google paid $1 billion for Waze plus about $100 million in incentives and other compensation to Waze employees.

Earlier reports said the deal went down for some $1.3 billion, with Google outbidding Facebook (FB), which tinkered with snapping up Waze for $800,000 to $1 million but subsequently backed off, as did Apple (AAPL), although chief executive Tim Cook denied the vendor’s interest.

McClendon said the Waze development team will operate independently and remain in Israel, a condition that was said to be important to the developer. He also said that Google intends to encourage Wazers—the heavily involved Waze user community—to stay that way.

“We’re excited about the prospect of enhancing Google Maps with some of the traffic update features provided by Waze and enhancing Waze with Google’s search capabilities. We’ll also work closely with the vibrant Waze community, who are the DNA of this app, to ensure they have what’s needed to grow and prosper,” he wrote.

Waze sports some 50 million users in some 190 countries. Users contribute to updating information on real-time road conditions by driving with the app open, providing accurate road reports in real time on traffic congestion, accidents, road hazards, speed traps and other driving data. The company’s navigation app is offered on multiple platforms, including smartphones, tablets and vehicle systems for navigating roads both in its native Israel and other countries.

Waze was founded in 2009 and three years later landed a $30 million financing round from Horizons Ventures, Kleiner Perkins Caufield & Byers, and iFund. It subsequently has raised an additional $37 million from Magma Venture Partners, Vertex Venture Capital, Qualcomm Ventures, BlueRun Ventures and Microsoft (MSFT), according to a report in the Globes, a local Israeli business outlet.

At a $1 billion purchase price, Waze’s founders stand to reap a windfall estimated at $125 million, according to the Globes report.