Google Inc (GOOG) Grabs a Competitive Advantage with Waze Acquisition

What It Means for Google

Assuming that this merger does go through as planned, Google stands to strengthen its advertising advantage over its closest competitors. Since it is targeted towards drivers who must navigate congested cities and suburban areas, Waze could have far-reaching commercial implications. For instance, the app could allow users to punch in the name or address of a specific business to find the fastest driving route while viewing the establishment’s existing Google Inc (NASDAQ:GOOG) Places for Business listing. Eventually, a Waze app that incorporates such features could serve as an important component of Google’s long-term “augmented reality” plans.

What It Means for the Competition

With Waze off the table, competitors like Apple and Facebook will need to find other ways to connect users with businesses in the real world. Whether they opt to develop such tools in-house or look for other start-ups that offer similar services, this transition is liable to require significant investments of time and money. At the very least, the Waze acquisition gives Google a major head start in this space. It is entirely possible that it could materially affect the long-term revenue growth of competing companies as well.

How Can Investors Play It?

Although Google Inc (NASDAQ:GOOG) is trading near its all-time highs, the stock has been a major source of strength in the tech sector. Its success has been especially noteworthy in light of Apple’s recent troubles. It seems obvious that investors who wish to gain exposure to this deal should play it with a long position in Google. More daring investors might also wish to leverage their exposure with a short position in Apple or Facebook. However, this would be a risky move: Apple recently launched a slate of new products that could give it a much-needed boost, and Facebook appears to be having some success in the mobile advertising space. As always, investors should read the “fine print” of this deal before jumping in.

The article Google Grabs a Competitive Advantage with Waze Acquisition originally appeared on Fool.com and is written by Mike Thiessen.

Mike Thiessen has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook and Google. Mike is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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