Reportedly beating competitors to the punch, Google Inc. (Nasdaq: GOOG) is set to purchase real-time traffic data service Waze Inc. in a move that is expected to help the search giant leverage its considerable mapping prowess. Location services have become a key area of focus for technology companies, as consumers increasingly adopt mobile devices.

In a blog post, Google confirmed the deal, which had been rumored, but did not offer financial details. Reports peg the price tag at 1.1 billion.

The Waze application consists of roughly 47 million users and lets them contribute real-time information that can help drivers avoid congestion with alerts about traffic jams and road hazards and suggestions of alternative routes. Waze also has options to report accidents, police presence and traffic cameras. The acquisition will allow Google to incorporate these social features into Google Maps and other tools, which currently do not allow user interaction. (For more on how Waze and similar traffic services work, see “In Traffic, Next Time, Use an App.”)

The deal with Google comes after talks between Palo Alto, Waze and Facebook Inc. (Nasdaq: FB) collapsed in May, according to reports.

“We evaluated many options and believe Google is the best partner for Waze,” writes Waze chief executive Noam Bardin, in a blog post announcing the deal.

Cash was Google’s winning card, tech analyst Rob Enderle of the Enderle Group tells Mergers & Acquisitions.

“What got Google in and Facebook out was that Facebook was bidding stock,” Enderle says. “Google can certainly afford it,” he adds, citing the company’s war chest of roughly $50 billion.

The transaction includes $1.03 billion to be transferred in cash directly to Waze and its stockholders and an additional $100 million will be awarded to employees based on performance, reports TechCrunch.

The 4-year-old Waze, which is based in Raanana, Israel and has U.S. offices in Palo Alto, Calif., has raised $67 million from various venture capital firms, including Blue Run Ventures, Horizon Ventures, Kleiner Perkins Caulfield & Byers, Magma and Vertex, as well as semiconductor company Qualcomm Inc.

The startup was raising more money in late 2012, when it reportedly received interest from other large companies, including Google rival Apple Inc. (Nasdaq: AAPL), which has been looking to improve its own mapping application, which has been criticized for shortcomings.

For more technology M&A coverage see, “10 Startups Marissa Mayer Bought Before Tumblr,”  and “Facebook's Parse Purchase Follows Flurry of App Deals.”

Subscribe Now

Complete access to real-time information and analysis of news and trends in the industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.