The $3 Billion Sale of Here: Possible Impacts on Local Search, Discovery and Delivery

Mapping is poised to be one of the next critical elements of local search, discovery and delivery. As mapping develops, its ramifications on localizing big commerce, the rise of local delivery services, and the development of the Connected Car loom large.

Google certainly sees it, hence its huge investments in Google Maps. Apple sees it, too. But other mapping sources are few and few and the reliance on Google as a common carrier for mapping information makes some parties uneasy.Hence, Nokia’s announcement this week that it will sell its Here mapping division for $3 billion to a consortium of German automakers made up of VW, Daimler and BMW. Here includes the NAVTEQ mapping sources, which were sold to Nokia in 2007 for $8.1 billion.

When the deal closes some time next year, Here will be operated as a separate company and will continue to license its technology to a wide range of players, including Amazon, Fedex and others.

The automakers are already major customers of Here, comprising more than half of its current earnings, which were $319 Million in Q2. As the automakers continue to develop dashboard integrations with mapping – including live search and commerce – they’ll become even more important.

Did the sale to the German automakers make more sense than a sale to Uber, which had also been in negotiation for similar amounts before dropping out? Probably. As we noted in a May 11 post, Uber adds value to its drivers and creates efficiency via mapping. But Uber is able to license its technology to the same effect. While Google could conceiveably compete in some ways down the road (auto hardware and product deliveries?), it isn’t a pressing issue.

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