Mark Zuckerberg has come a long ways to get Waze.
The Facebook CEO has had his eye on the social mapping service for nearly two years but is only just now closing in on a deal to purchase it. The agreement is set to close shortly, according to sources with knowledge of negotiations.
“The deal took a long, long time,” one source said. “They started talking two years ago, even more, but Waze rejected and rejected.”
When Facebook was still a private company, it offered around $50 million to buy Israel-based Waze. The figure eventually grew to $500 million, sources said. Some reports have pegged the price as high as $1 billion.
Facebook ponied up more than Apple, which approached Waze late last year when it was trying to beef up its much-maligned mapping service.
The pursuit paid off for Facebook, and sources said the deal was all but done yesterday with little room for another company to come in and snatch it away.
“This deal is closed,” the source said.
Waze has been courted by a number of tech heavy-hitters for months even though it has yet to turn a profit, a source said.
In that regard, the acquisition is similar to Facebook’s $1 billion deal last year for photo-sharing app Instagram, which has no revenue.
By Facebook standards, the deal was a success when Instagram went from 25 million users to 100 million users sharing photos through the service monthly.
Waze has insignificant revenue at this point, a source said, but it does have advertising deals with merchants who show up on its maps.
Waze is a mapping service that allows users to contribute to its accuracy and utility every time they use it.
Waze rivals companies like Foursquare and Yelp, and would add to Facebook’s already formidable reach into local markets.
“If they were to go ahead and acquire Waze, Facebook would be one step closer to local merchants,” said analyst Youssef Squali with Cantor Fitzgerald.
“It’s a social-enriched mapping environment where you can easily display all local merchants.”
Waze also gives Facebook global positioning data on its users, a potential trove of information with which to better target ads.
Facebook declined comment yesterday, saying, “We do not comment on rumors and speculation.”