Google has announced that it intends to acquire Waze, a company providing social navigation and mapping apps. The deal is rumoured to be worth $1.1 billion to $1.3 billion, not at all bad considering Waze's revenues may be less than $10 million. This is a strategic move for Google: The value of Waze is not in its revenues, but in the community it's built and the data it collects.
I first wrote about Waze on Big Data Republic in late 2012 as an example of a company leveraging smartphones to create a sensor network. It's a space I've been working in for several years with OpenSignal -- we crowdsource cellular and WiFi data -- and we have several times looked to Waze for inspiration. To me, the acquisition of Waze is a big validation of a particular philosophy of how to collect and use data.
A cheaper, faster way of getting map data
At the heart of Waze's business are its mobile apps, these offer turn-by-turn GPS navigation, live traffic notifications, prices at nearby gas stations, warnings of hazards, information about speed cameras -- in short, just about everything you might care about while driving.
What's seriously impressive is that Waze not only presents all this information, it -- or its users -- are the source of it. Waze is operating a sensor network: Using mobile devices as sensors measuring the flow of traffic, it's combined this with more active crowdsourcing whereby users can manually submit accounts of problems.
Waze's maps are a great example of fusing sensor network data with crowdsourced input.
In a discussion with The Wall Street Journal, Waze CEO Noam Bardin described how 1.5 billion kilometers of road are driven a month, and users enable Waze to see where the roads really are -- filtering out blocked roads and abandoned infrastructure projects that cause problems for companies creating maps on satellite imagery.
On top of this, users can make manual edits for any areas where the auto-collected data is sparse or in error.
This allows Waze to create high-quality maps at a fraction of the cost of other methods. It's estimated that Google spends $1 billion to $2 billion a year driving streetview cars worldwide, which is not at all hard to imagine, given their resolution. Waze collects a similar dataset without the expense and complexity of maintaining fleets of cars worldwide. Noam Bardin summed this up as, "They use money, we use people." As a further bonus, Waze's map data is much fresher than Google's.
What can we learn from Waze's model?
Google does operate Google Maps as a sensor network: It feeds back data to help improve its location services. However this is not something of which regular users are aware. Waze went all out to involve users in its data, pushing the message that data collection is not just a byproduct of using the app, it's what makes it tick. In fact Waze tends to shun the term "user" -- it prefers "contributor."
There are lessons here that apply to anyone operating or building a sensor network, but I think these ideas can also be applied more broadly. The message is this: If you can, and if it makes sense, turn your users into contributors by actively involving them in the collection of data.
The betrayal of loyalty cards
The traditional logic is to hide the fact that users are providing you with data, make them sign through some T&Cs, coax them with incentives, but avoid reminders of the ways in which they're sharing data with you.
Supermarket loyalty cards fit this pattern neatly: A user signs up; then, when using the card, is rewarded with points that can be redeemed. What if users could see lists of items they bought? What if they could be emailed reminders when they're likely to be running out of a certain product? And what if they could share news of their favorite offers with friends?
Users are concerned about privacy, and rightly so because it's often not clear to them how their data is used. Educate your users and turn them into contributors, and those concerns will dissolve. Maybe this won't work for all business models, but there's at least one billion-dollar example where it does.
Re: the waze story @SharCo we just had a pilot scheme banned in UK where mobile phone locations were being gathered by intelligent street waste bins! Allegedly there was no personal information being collected but if that was the case then why do it?
User Rank: Petabyte Pathfinder 7/4/2013 | 6:15:28 AM
Re: the waze story That's the thing I don't like most about what Facebook is doing. Good point that the next issue here would be sustainability. They're off to a good start, but they need to find a way to keep people interested to contribute.
Re: the waze story They are all collecting data about us but is it sufficient for them to use it for anything other than basic marketing? I think not. All it generates is unwanted phone calls and emails.
So far as Facebook is concerned they are though collecting data and information and there is no clear cut policy that whether they are using this information or sharing it with the marketing companies. But the Waze provides a feature that the user can choose to contribute or not. I think sustainability is an issue here. Nothing will sustain for long, if something new comes or some new players take over some business then it's gone. The prime objective is to provide the user satisfaction and I also guess Google is trying to acquire the Waze because it assumes that the customer information collected through Waze is more reliable and can be used for marketing purpose as the user has opted to contribute.
User Rank: Gigabyte Governor 6/16/2013 | 8:24:49 AM
Re: Look in to the light... Debera, i think google is more interested in the Data coming in from Waze's wide contributors base of 50Million. Then making use of Waze's mapping application.
This data will prove a valuable asset to facebook too if it wins the bid. Considering facebook's experience in social networking, facebook might do a better job in strengthing Waze's community then google.
Re: Look in to the light... Facebook is bidding against Apple and google in order to acquire waze technology, this would make its platform a complete system so that users never go for any competitors product or technology.
Re: Look in to the light... Qasim you are absolutely correct , currently nothing wrong has gone which can shatter our trust from facebook but one cannot guarantee this about future . According to me Waze integration with google is better than facebook because google has prior experience in mapping which facebook dont have and Waze is a social driving GPS application which requires mapping .
User Rank: Gigabyte Governor 6/15/2013 | 2:28:17 PM
Re: Look in to the light... @ Saul, Sustainability is very big term we are using here. Both are sustainable; the Facebook way and the Waze way. But which is more satisfying to the users? ofcourse the Waze way of dealing with User's data. People offer Facebook their data inform of pictures, videos pages they view or like, interests they share with their friends because their peers have chosen to do so, I think it's true. And because nothing yet has gone wrong which would lift our trust from facebook. So it's OKAY for the time being. But the same can't hold true for the future.It leaves me astonished when I read all these articles about NSA and Big Data, Our Data.
What do you think about us sharing our information with facebook saul ?