Waze, the driver-powered carpool app, is one of Alphabet's secret weapons
Police in 0.4 miles... Ease off that accelerator. Waze gives its users the handy heads-up via emoji-ish car icons. Google dropped $966M in 2013 to acquire the Israeli app, and now it's Alphabet's other navigation app. Last month, a bank analyst knighted Waze a "buried treasure" for Google-parent Alphabet. Here's why.
- Network effects: The more people wazing, the more data Waze has on traffic and your ETA. More users ➡️ better product ➡️ more users ➡️ better product. Repeat (infinitely).
- Daily habit: 75% of smartphone users regularly use a navigation app.
- Near-monopoly status: Google Maps and Waze combined capture over 80% of the navigation app market — It's a shocker (and mistake in our opinion) that Google was allowed to acquire its main competitor.
"You can let me out right here"... Now that it's pretty much as good as Google Maps, Waze is differentiating itself with a carpool feature. If you're heading to work, you can use Waze to pick up fellow commuters. A 5-minute detour could earn you $5 driving Katie to that 9am all-hands meeting. Waze hopes that steals business from the ride hailers.
High engagement = High profit potential... Google Maps and Waze are some of Alphabet's least-monetized assets — so the analyst thinks Waze will start packing in ads to become a profit puppy for the parent company. Picture this:
- Take exit 13 to pick up your Waze carpool.
- Continue East on Hudson Parkway for 2 miles.
- There's a Starbucks just 0.1 miles away offering a refresher for this 98-degree sweltering summer day.