Google Inc. (Nasdaq: GOOG) continues to be the standard search engine tool for desktops, and a recent acquisition shows the company making its way to our car dashboards.

Observers see the purchase of Waze Inc. as not only a boost to Google's mapping prowess, but an example of how crowd-sourcing mobile users has become a heated area of focus for tech companies looking to improve their location-based services.

The trend comes as more people use smart phones and mobile devices while traveling. The Waze application lets users contribute real-time information that can help drivers avoid traffic jams and road hazards by sharing alerts and alternative route suggestions to name a few. The data can also be leveraged to figure out where people are headed to next and at what times, thus making the information invaluable to any retailer or advertiser looking to reach potential customers at any time of day.

It is no wonder that Google bid against Facebook Inc. (Nasdaq: FB) in the auction for Waze, says Jim Bak, a spokesman for Inrix Inc., which also uses crowd-sourced data to report traffic.

"That was the reason Facebook was so interested. Mobile is so important and they're trying to monetize that platform by having that mapping element," Bak says.

In a blog post, Google did not offer financial details of the deal, but reports peg the price tag at $1.1 billion-an "incredible" number, according to Bak, considering Waze gathers data only from its own application and monetizes its business through in-app advertising. Inrix, in its own right, taps into traffic sensors, emergency responders and even the U.S. Department of Transportation to pull data. The company touts more than 150 million costomers worldwide. By contrast, Waze's user base hovers at around 47 million.

Another traffic service that is more well known is TomTom NV (Euronext: TOM2), a Dutch manufacturer of automotive navigation systems, which offers a similar service called HD Traffic that lets users contribute real-time information.

The hefty price tag of Waze demonstrates the competition acquirers face in this particular space.

"You had two companies that were bidding for Waze and that was building up the price," Bak says.

The winning card? Cash, 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 in cash.

The deal is also a big win for Raanana, Israel-based Waze. The 4-year-old company 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.

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