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Waze's ex-CEO says app could have 'grown faster' without Google

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Paresh Dave
·2 min read
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By Paresh Dave

Feb 18 (Reuters) - Waze has struggled to grow withinAlphabet Inc's Google, the navigation app's formertop executive said, renewing concerns over whether it wasstifled by the search giant's $1 billion acquisition in 2013.

More than 140 million drivers worldwide use Waze monthly, upfrom 10 million when it was acquired, according to a Wednesdayblog post by Noam Bardin, who left Jan. 31 after helming Wazesince 2009.

But Waze usage is flat in some countries as Google Maps getssignificant promotion, and Waze has lost money as it focuses ona little-used carpooling app and pursues an advertising businessthat barely registers within the Google empire, according tointerviews with 11 former employees over the last year.

Amid increased scrutiny of "killer acquisitions" designed toneutralize potential competitors, antitrust critics and U.S.lawmakers in recent months have questioned whether competitionauthorities failed by allowing Google to purchase Waze.

"We could have probably grown faster and much moreefficiently had we stayed independent," Bardin wrote, notingthat Google imposed constraints on Waze and copied its ideasinto Google Maps.

Bardin, who has yet to be replaced, declined to commentfurther.

In response to his blog, Google said it "investedenormously" in Waze and its community, citing increasedmarketing spending, and added features such as Waze Carpool,toll prices, contactless fuel payments and integration withAudible.

"We wish Noam all the best with his future endeavors," itsaid in a statement.

Former employees said Bardin tried to maintain an innovativeculture by holding get-togethers apart from the rest of Googleand discouraging promotion and bonus procedures popular at otherGoogle units.

But Bardin said he was naive to believe that Waze couldreach its full potential within Google despite thesemi-autonomy.

"We ended up with the worst of both worlds - the challengesof a start-up (scale, access, distribution) with the constraintsof a corporation (forced to use internal not-best-of-classsystems, cost structure, politics, culture etc) all aggravatedby the inability to quickly hire and fire," Bardin wrote.

Google perks, including free meals, stock-based compensationand liberal leave policies crept into Waze and eroded its"startup magic," he lamented.

Founded in 2008 in Israel, Waze grew popular because itcrowdsourced map and traffic information from users, keeping itmore updated than rivals and shaving minutes off journeys.

Before the pandemic, Waze generated more than $200 millionannually from fast food, retail and other ads shown throughoutits app, two former employees said, but how to grow further hasbeen a big internal debate.

Some employees advocated an increased focus on advertising,but Bardin was more interested in an app Waze launched in 2016to connect commuters with people who would pay them for rides,the sources said.

Waze Carpool generated 550,000 rides in September 2019. Tostoke usage last year, Bardin encouraged employers to subsidizecommutes of essential workers. Results of that effort have notbeen disclosed.(Reporting by Paresh Dave in Oakland, California; Editing byJonathan Weber and Richard Chang)