The situation surrounding map software provider Waze has gotten even more interesting. According to people familiar with the matter, Google (News - Alert) is now considering buying Waze, which may lead to a bidding war with Facebook. Waze has actually garnered interest from multiple parties and is seeking an offer over $1 billion.

However, the Israel-based start-up may also choose to remain independent and instead seek to raise a round of venture capital financing, according to Bloomberg Businessweek. This outcome is more likely than one might assume, as Waze reacted mildly to an offer from Facebook (News - Alert) between $800 million and $1 billion earlier in May. This is because Facebook wants Waze to reassign some employees to California, which Waze is unwilling to do.

Google entering the picture will only complicate this situation further.

Waze's mobile app, which currently boasts over 40 million users, would indeed be a valuable acquisition for either Facebook or Google, as it helps improve driving directions by leveraging information gathered from online communities. This would obviously be an excellent functionality to incorporate into Google Maps, but it seems unlikely that Waze would be willing to be absorbed.

Indeed, despite several interested bidders, no one has come close to securing a deal and talks are apparently close to falling apart. Waze may decide to return to its investors, which include Microsoft (News - Alert), to raise money as it did in a 2011 funding round led by Kleiner Perkins Caufield & Byers and Horizons Ventures Hong Kong. Other early investors include Magma Venture Partners and Vertex (News - Alert) Venture Capital in Israel, and BlueRun Ventures in Silicon Valley.

Meanwhile, many online are skeptical over reports that Google has expressed interested in Waze. For example, TechCrunch said it contacted "multiple credible sources," which all declared the rumors untrue.

Either way, it looks like Facebook may end up losing Waze if it doesn't relent in its demands to move employees.