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Is Facebook preparing to bid $1bn for mobile firm?

Is Facebook preparing to match the $1bn it paid for Instagram by paying a similar figure for an Israeli mobile start-up called Waze?

Waze: community-based traffic and navigation app

Waze: community-based traffic and navigation app

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If it is why would Facebook stump up so much cash for what is described as a "social" mapping app for smartphones?

The answer could be in Facebook's future as a mobile advertising platform. Pundits believe Waze would give the social network more mobile users and thus grow its advertising revenue.

Waze was founded in 2009, backed by investors including Horizons Ventures Hong Kong and Kleiner Perkins. It currently has around 40 million users, having last year doubled its user base to 20 million in six months.

The real-time mapping service is updated by its users who post news on traffic data and speed traps. The more users who join Waze, the more accurate its maps become. The app is being seen as another piece of the mobile tapestry that Facebook is looking to build.

Business Insider came up with three things that Facebook could get out of Waze.

1. To boost local search

Microsoft, Google, and Apple all own mapping services and Waze would give Facebook its stake in that market. Such an acquisition would also boost Facebook's local search. That's something that will become an increasing source of revenue.

2. To compete with Google Maps

If Facebook is serious about the long term future of Facebook Home, Waze will ensure that the service doesn't push people towards Google Maps. It also allows it to distance itself from Google and create a truly "social map".

3. Waze is a really good app

"The simplest and most important reason is that Waze is an awesome, quickly-essential-to-users mobile app, and mobile "real estate" is what Facebook desperately needs," says Business Insider. Facebook needs apps with strong appeal that cannot be displaced by the native apps from Apple or Samsung or Google.

It could also add serious muscle to Facebook Graph and its news feed, which would know increasing amounts about its users, including where they've been.

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