How Facebook Might Buy Your Location for $1 Billion

Photo: Michelle Ress/Flickr


Multiple reports have Facebook in talks to buy Waze, a mobile traffic map constantly updated by users, for roughly $1 billion. Why is Facebook so interested in a map?

It’s not. Facebook is almost certainly interested in the mutual self-tracking club behind the map rather than the map itself. The way Waze works, you see, is that everyone who downloads fresh traffic data is also contributing fresh traffic data; the app regularly and automatically uploads your physical locations which can be used to determine your speed. (Here’s a video about it.)

To Facebook, Waze must look like a fantastic engine to drive “check-ins,” where users freely share their physical location with the social network and with their friends. (Neither Facebook nor Waze are commenting on their alleged acquisition talks.) Trapped in the Waze app, location data is anonymous and thus difficult to sell to advertisers. If integrated with Facebook, however, the same location data becomes hugely valuable, since it would be tied to Facebook identities, including demographic and social information beloved by advertisers.

If Facebook can acquire Waze and get users to check in their whereabouts with it, it will be like opening the spigot on a new firehose of user activity and, more importantly, advertising dollars. It will also give Facebook a handy edge in its competition with Foursquare, a social network built entirely around check-ins

Location sharing would also bring huge value to Facebook if the data collected by the app could be converted to formal Facebook “check ins,” which can be used as an excuse to show coupons and other special offers from nearby businesses and which can be commented on by a user’s friends.

Until now, Facebook users haven’t had much motivation to use the social network’s check-in feature. Foursquare offers badges and discounts to people who check in. Facebook has no badges, and while it does provide for check-in-related discounts, its check-ins seem mainly used by users to provide information to their friends.

To provide stronger motivation for check-ins, Facebook is considering offering free Wi-Fi access at cafes and other locations, but so far has only run very limited experiments. The Waze app would be a much more elegant catalyst for check-ins. Instead offering the rough equivalent of a bribe from Facebook, Waze offers participation in a virtuous cycle among peers: if you let me track your car a little bit, I’ll let you track my car a little bit, and we’ll both get where we’re going faster.

If Facebook can use Waze to prove that there are good, selfish reasons for people to share their locations on the road, it will then be a short step for the company to posit that people should share their locations all of the time. Facebook could turn Waze into a sort of stalkery version of Siri, watching your daily movements and providing helpful reminders, like a nudge to leave the office in time for spin class, or an alert that if you don’t finish your morning coffee in the next three minutes, you’ll probably miss your train. That sounds creepy now, but you might change your mind the first time Stalker Siri keeps you from missing your flight.


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