TMCnet Feature
May 14, 2013

Facebook, Waze May Lose Deal if Neither Side Yields

By Ed Silverstein, TMCnet Contributor

Is it better to live and work in the land of milk and honey or in Silicon Valley?

That’s the question facing two tech companies trying to work out a key acquisition.  If neither side budges, Facebook’s (News - Alert) proposal to acquire Israel-based Waze for up to $1 billion could be lost.

As it now stands, Facebook wants to reassign some of the company’s employees to its own existing facilities in California – but Maze wants to keep the company’s development center and employees in Israel where they are currently located.

Waze top executives said the development center and its 100 employees must remain in Israel, YNET reported.

Calcalist said that Facebook would pay between $800 million and $1 billion for Waze. At that amount, it would be the highest ever paid by Facebook to acquire another company, TMCnet reported. The final amount may depend on whether Waze agrees to Facebook’s demands. However, if arguments continue, the deal could fall through altogether.

Facebook has made similar demands during other acquisitions, closing down operations elsewhere and moving those employees to California.

News reports suggest that the Waze deal would be benefifial for Facebook because it would get a powerful mapping service from the acquisition, allowing it to compete with some of its key rivals which already offer these services. It would also help Facebook further expand in the mobile sector – a current company priority.

With Waze, users first type in their desired destination. The app remains open on their phones as they drive, and along the way it picks up traffic and other road information, which is then shared across the Waze community. Users can also let the service know about car accidents, police surveillance, or other road incidents. Waze also provides a community for map editors who report and confirm data on the site.

Edited by Blaise McNamee
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