Remembering MapQuest

Verizon’s New Location Asset

Mapquest logoDuring the weekend, news emerged that Apple has purchased a California location technology start-up called Coherent Navigation. The company has developed methods of combing GPS signals with those of lower-orbit satellites for extremely precise location fixes, possibly down to a few centimetres. It’s not clear what Apple will do with Coherent Navigation’s expertise, but for some activities, metre-level precision just isn’t good enough.

Apple has been gathering location assets during the past several years, purchasing small, innovative companies such as Embark, Locationary and Pin Drop. Apple has had some high-profile gaps in providing location and mapping services to iOS users, and the company has been active in pulling together talent and technologies to bring its own services to market.

CCS Insight has long predicted increased consolidation in the location services space (see Mobile Navigation Market Poised for Consolidation as Wayfinder Acquires Navicore from 2007. In fact, we expected a greater degree of location-related acquisition activity. For example, we’re rather surprised that TomTom remains independent despite holding one of the industry’s rarest resources, the digital maps created by Tele Atlas.

One of the first major mapping acquisitions was by AOL when it purchased MapQuest in late 1999 for $1.1 billion. At the time, MapQuest was the go-to site of go-to services. AOL was looking for a hook into local advertising and MapQuest provided the company with highly-detailed searches. It was a hot property.

Though MapQuest has since lost much of its traffic to services from Google as well as a few other connected mapping services, it remains a popular online site and also offers a highly-downloaded navigation app for Android, iOS and Windows Phone devices.

In the current location-services land grab, it’s worth noting that MapQuest will soon become part of Verizon on completion of the latter’s $4.4 billion acquisition of AOL. At a time when operators are reinventing themselves, Verizon will soon own many top ad services and Web destinations including a service to get people to their destinations.

Verizon currently offers a turn-by-turn, app-based navigation service called Verizon VZ Navigator, which uses probes to keep subscribers up to date on traffic conditions. Unlike services from MapQuest, Google and Here, Verizon charges a fee: $5 a month or $1 a day. It’s difficult competing against free services and alternative business models.

MapQuest will come to Verizon at a time when the MapQuest brand would benefit from a new burst of energy. As Verizon turns to its subscribers for recurring advertising revenue opportunities, it may find that it has the location assets to be competitive in areas such as location-based advertising. MapQuest is still well known among some generations. It will be interesting to see what Verizon will do with this asset as it finds itself competing against services from Apple, Facebook and Google.

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