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Google, Apple Map Battle Quickens With Waze Deal

Google (GOOG) on Tuesday said it bought real-time traffic info company Waze, pressing the gas pedal in its battle with Apple to be the top provider of turn-by-turn directions and up-to-the-minute traffic updates.

Google reportedly paid more than $1 billion for Israel-based Waze, although the search leader declined to confirm that price or comment beyond its blog post announcing a purchase that had been rumored to be in the works.

The acquisition is a win for Google in an ongoing war to become the mapping provider of choice vs. Apple (AAPL) and others such as AOL's (AOL) MapQuest, says tech analyst and consultant Jeff Kagan. Those free services are part of a group that's quickly growing in influence vs. paid in-car GPS systems offered by TomTom and Garmin (GRMN).

"Google wants to own this space" inside people's cars, Kagan said. Winning here "will be very valuable," he said.

Waze developed its free app for Apple's iPhone and iPad iOS and for Google's Android mobile platform. The app has nearly 50 million users, the company says.

Waze's app offers turn-by-turn navigation features, but its main draw is user-contributed content. Waze users themselves provide real-time updates on traffic conditions and more, or what is called "crowd-sourced" information. If a user, for example, sees a police car waiting to catch speeders, the user can post the police car's location for all of Waze's users to see.

"We're excited about the prospect of enhancing Google Maps with some of the traffic update features provided by Waze and enhancing Waze with Google's search capabilities," Google Geo Vice President Brian McClendon wrote in announcing the deal.

It's a "strategic positive" for Google, wrote RBC Capital Markets analyst Mark Mahaney in a research note Tuesday.

It will add "a unique social layer" to Google Maps vs. rivals, said Cantor Fitzgerald analyst Youssef Squali in a note. It will "further differentiate Google from the competition.

Google's announcement comes a day after Apple introduced mobile software that'll beam turn-by-turn directions via Apple Maps to the in-dash screens of some cars. Apple said 12 automakers, including Honda (HMC), Mercedes-Benz and Chevy, are building cars that can use Apple's technology.

An in-dash "screen war" is just starting and Apple "has an early advantage," wrote Wedge Partners analyst Brian Blair in a research note.

Apple's auto integration is a "strong incentive for consumers to stay within the Apple ecosystem," wrote Susquehanna Financial Group analyst Chris Caso in a research report.

Still, Google is the leader in maps, one of the key killer applications for mobile devices.

Apple Forced To Reverse

Google Maps was part of the original suite of pre-installed apps on Apple's iPhone when it launched in 2007. But when Apple Maps launched a year ago, Apple ejected Google Maps from the 2012 version of its iOS 6. Google users cried foul, pointing to many glitches with the early Apple Maps. In December, Apple hit reverse and allowed Google's map app, which quickly became one of its most downloaded apps.

Apple's and Google's software both provide reviews of businesses, as well as ads often tied to specific locations. Apple partnered with reviews site Yelp (YELP), while Google uses reviews from its own Zagat restaurant guide and Google+ social network.

Google's acquisition was called a defensive move by some.

Facebook (FB), Apple and others reportedly had been in talks to acquire Waze. The deal "keeps this potentially valuable asset from competitors," wrote Squali.

But there is antitrust concern. The deal could make it hard for startups to compete, says a blog post by FairSearch, which tracks competitive practices at Google.

A Federal Trade Commission representative declined to say if the acquisition would warrant antitrust scrutiny.