Ride-sharing company Uber has submitted a bid of up to US$3 billion to acquire Nokia’s Here maps service, The New York Times reported Friday.
Several Here suitors have surfaced since April, when Nokia made known its intent to sell the service, including Facebook, Google, and a consortium of German automakers and Chinese search engine Baidu.
The biggest threat to Uber’s bid may be that consortium, composed of Audi, BMW, Mercedes-Benz and Baidu, according to the Times’ unnamed sources.
Baidu’s interest likely is related to an existing partnership with Here, which began powering Baidu Maps late last year. However, the automakers may be even more motivated to stake a claim in the mapping service.
Nokia purchased Here’s foundation, Navteq, in 2007, and the mapping system eventually evolved into Here. The service now powers about 80 percent of car navigation systems, making the software a compelling purchase for automakers.
The offer from the automaker consortium wasn’t specified, but it was said to be competitive with the bid Uber submitted.
Why Uber Wants It
Uber also has a lot to gain from acquiring Here.
Uber needs to break its reliance on Google, according to futurist Rod D. Martin, CEO of The Martin Organization.
“Uber is starting to develop self-driving cars to compete with Google,” he told the E-Commerce Times, “and just as Apple needed to replace Google Maps on the iPhone when Google introduced Android, Uber can’t afford to bet its future on Google’s continued goodwill.”
Uber and Google eventually will find themselves sparring over the data they derive from customers, suggested Andy Abramson, CEO of Comunicano.
Data is the new currency, he said.
Uber also has little control over Google Maps. There isn’t much the ride-sharing company can do when Google Maps erroneously sends drivers off course and to the wrong location, Abramson pointed out.
“Buying a real mapping and GPS company gives Uber intellectual property and human capital that’s intrinsic to their business,” he told the E-Commerce Times.
What Uber Risks
One of the reasons Uber may be seeking out Here — independence from Google — also could manifest as one of the risks of the acquisition.
“It exacerbates the growing rift with Google,” said Martin. “Everyone knows where that’s headed, but it isn’t there yet, and a premature break would hurt Uber a lot more than it could possibly hurt Google.”
A lesser risk, though valid, could be Uber’s ability to execute its implementation of Here, he added.
“Here might prove inferior to Google Maps — particularly once a new, otherly focused company owns it,” said Martin. “That was certainly the case with Apple Maps, and it hurt.”
Why Google Wants It
Although Google already runs the planet’s most successful mapping software, it could make a more compelling bid and gobble up Here.
“Google would be bolstering their team with engineering talent that knows mapping and GPS,” Comunicano’s Abramson pointed out.
Here’s Navteq foundation gave Nokia a GPS and mapping team that was the best in the business, he observed, and that’s something Google would want.
“The intellectual property that Navteq and Nokia had, or now has, is still very rich,” he remarked, “and that would give Google significant clout.”