FORTUNE — As an unabashed fan of Waze, the Israeli navigation app, I’m disappointed about its possible acquisition by Facebook. The talks toward a $1 billion buyout evidently have hit a snag. Good, I hope the trouble doesn’t get resolved.
Facebook (FB) isn’t misguided in wanting to own an app of rising popularity that might surpass Google Maps (GOOG) or Apple’s (AAPL) mapping function. (Well, maybe.) But I’d rather see the creative energy that created Waze keep inventing striking new, original features that will maintain it as the best way — paraphrasing its slogan — to outsmart traffic together.
According to several unconfirmed reports, Waze has been offered $1 billion to sell to Facebook. However, the company is resisting Facebook’s demand that top executives move from Israel to Silicon Valley.
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The company got its start in 2008 and has roughly 10 million users. It’s free and has an attractive and easy-to-use graphic interface, including a social media dimension that allows “Wazers” to communicate with one another, as well as to post locations on other sites such as FourSquare, Twitter, and Facebook. Wazers can post reports of traffic, accidents, speed traps, and hazards — and driving times are measured, so traveling slowly, for example, on the Interstate indicates a slowdown.
A recent innovation allows users to mark roads that may have been closed temporarily. In that case Waze finds a new route for those navigating in the area. As soon as the app detects drivers returning to the road that had been closed, it will return as a navigable route.
Automotive navigation services sold as features on new vehicles probably are in peril to the extent that Waze and similar products continue to grow in popularity. Why, after all, would most people spend $1,200 for an installed infotainment unit when Waze does the job on a smartphone without charge?
Among those associated with Waze are blue-chip investors such as the Kleiner Perkins Caufield & Byers’s Digital Growth fund and Li Ka Shing’s Horizons Ventures Hong Kong. Mary Meeker, KPCB partner and onetime Internet securities analyst, has been a strategic adviser.
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Waze’s U.S. office and its chief executive, Noam Bardin, already are in Palo Alto. The issue could be whether to move the company’s research and development employees from their suburban Tel Aviv offices.
Facebook clearly isn’t shy about using its $64 billion market capitalization to buy pieces of the digital communication world that will expand its functionality to its billion or so users, especially in mobile. Last year Facebook bought Instagram in a deal worth $747 million.
In the early days of the last century General Motors (GM) grew by acquisition, horizontally and vertically, snapping up all sorts of innovative companies until it became the world’s largest automaker. Eventually GM turned into a rich, conservative, slow-moving company that was averse to risk — though that process took 80 or 90 years.
The last thing Mark Zuckerberg wants is for Facebook to turn into the General Motors of social media platforms. To make sure that doesn’t happen, he’ll have to make sure that the creativity and genius he buys won’t be nullified by big money.
