Understanding Google My Business & Local Search
Microsoft Buys Nokia – What will become of Navteq/Here?
Microsoft bought Nokia today for $7.2 billion dollars. Nokia, you will recall, bought Navteq in 2007 for $8.1 billion in what was hailed at the time as pivotal move by Nokia into location based services.
But as Horace Dediu pointed out, by late 2012 Navteq had been losing about $1 billion a year for Nokia and the purchase effectively had cost Nokia’s stock holders $11 billion in total since it had been acquired. He notes that Google is rumored to be spending a similar $1 billion a year to maintain their Maps data. Tomtom, now worth about $1.5 billion in total, appears to have done little better with their $4 billion TeleAtlas purchase.
Neither company has kept up with Google in the pace of map development and certainly not in the pace of mapping updates. If you have ever had to suggest a map change to either TeleAtlas or Navteq and anticipate the map update, you know that you can get very, very old waiting. Both Google and OpenstreetMap have the ability to get updates through their systems in weeks not months or years. Neither Navteq nor TeleAtlas seem to.
Owning a mapping company has not provided much if any value to the purchasers. And it would appear that the expense of running them has constrained their ability to compete with Google.
Will that continue to be the case going forward? Can Microsoft/Nokia and TomTom extract enough value to continue their expensive and not very successful efforts to maintain the maps? It would seem that the world is not a big enough place to support 3 mapping companies even when the maps are used to support the other sales efforts of their owners. As reader Marc points out, this leaves Here as part of Nokia’s network infrastructure business and a likely drag at that. Hardly a long term match and likely to be spun off and perhaps more appealing to Apple or Samsung. What value could it possibly bring?
And where does that leave Apple? Buying a
TeleAtlas a mapping company is one thing, maintaining it is quite another.
Update: Here is Microsoft’s “strategic rationale” vis a vis Here/Navteq:
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