Don Harrison, Google’s vice president of corporate development, confirmed today that the company had agreed to a billion-dollar price for the social mapping app Waze in a deal announced earlier this month.
“We’re focused on the user experience, so we are willing to pay an aggressive premium sometimes where we think there’s room for user growth,” Harrison said.
Harrison was speaking at a panel on mergers and acquisitions at Bloomberg’s Next Big Thing Summit.
Also on the panel was Ken Hao, managing partner at Silver Lake, a private equity firm that specializes in technology businesses. Hao joked that one of his firm’s investment rules was “never bid against Google,” but also validated in general terms the high price tag for a product that Google will be able to fit in neatly with its own social and navigational offerings.
“It’s stunning what kind of earnings these guys can generate by plugging it in to their other offerings,” Hao said.
Harrison indicated that Google would not shut down or dramatically change the Waze mapping app.
Drago Rajkovi, the head of technology mergers and acquisitions at JPMorgan Chase & Co. and another panelist, put a darker slant on the acquisition. He said that the biggest companies in technology account for a “staggering” 30-40 percent of the merger and acquisitions market.
“A lot of them, having grown that big, have lost their way in innovation. Google is trying very, very hard for that not to happen,” he said.