Is the Map All That? Google, NAVTEQ and Imaging America

There was an interesting blog posting on Directions Magazine that is essentially a comment by a Google exec saying that they weren’t interested in bidding for Navteq because they felt that if they wanted to get into the digital map making business they could do so much more economically by opening up map making to the masses and develop a wiki map program to build maps through their Google Earth Platform. There is an interesting article over on O’Reilly Radar about how Google already used ‘crowdsourcing’ to develop maps in India.

Google currently sources data for their maps from a large variety of sources, but I don’t think it should come as too much of a surprise to see Google make their own maps in the very near future if they so wish. With the all the street level initiatives under way as well as the recent acquisition of Imaging America many of the pieces are there for Google to begin building build their own navigation maps from data they already own or can now more easily acquire. For simple road navigation the existing maps are likely more than adequate and my guess is that NavTeq and TeleAtlas have priced the maps low enough for online players like Google that there is not a financial motivation for developing their own. Only 5% of Navteq revenue comes from Internet and Wireless, which must means many orders of magnitude smaller revenue on a per-map render or user basis that in the auto segment… my guess is that this is in part a defensive maneuver, to keep folks like Google from turning from a customer into a competitor.

One short year ago, Navteq shares were getting beaten up in part because of concern by Wall Street types that technology such as the very high resolution photos that Imaging America’s equipment makes possible, would soon mean that detailed maps could be created by a variety of new market players. Buyers of the images would simply need to use the images to build their own maps using a few folks in a back office somewhere using some CAD software rather than via the more expensive and time consuming process of driving the nations’ roadways. That threat still exists, particularly for consumer navigation quality maps, but I don’t think that is as interesting to Google as the acquisition of previously unmapped items ranging from fire-hydrants to pine trees and street signs which will continue to feed the need for more and more data that is Google’s lifeblood.