Google Maps

In this episode of Acquired, hosts Ben Gilbert and David Rosenthal delve into the origins and impact of Google Maps, beginning with the acquisition of Where 2 Technologies in 2004. They explore how the Rasmussen brothers' vision for a dynamic, web-based mapping platform revolutionized navigation and local search, leading to Google's dominance in the space. The acquisition's significance is underscored by its comparison to Instagram's success, with Google Maps creating immense value for users and businesses alike through advertising and API access. The episode also touches on the challenges of recruiting for Where 2 and Google's continued investment in mapping technology, including the strategic acquisition of Keyhole and Zipdash, which contributed to the development of Google Earth and real-time traffic data. Additionally, the episode highlights the potential revenue streams from Maps' advertising and API licensing, suggesting that Google Maps could be as lucrative as Instagram for Google.

• Ben Gilbert introduces himself as the co-founder of Pioneer Square Labs, a startup studio and venture fund in Seattle.
• David Rosenthal introduces himself as a general partner at Wave Capital, an early-stage venture firm in San Francisco.
• The hosts discuss Google Maps and the acquisition of Where 2 Technologies in 2004, which initiated Google Maps' success.
• They compare Google Maps' success to Instagram's, considering the number of uses and API integrations.

"Welcome to season five, episode three of acquired, the podcast about great technology companies and the stories behind them. I'm Ben Gilbert, and I'm the co founder of Pioneer Square Labs, a startup studio and early stage venture fund in Seattle."

This quote introduces the podcast and the host, Ben Gilbert, setting the stage for the episode's focus on Google Maps.

"And I'm David Rosenthal, and I am a general partner at Wave Capital, a early stage venture firm focused on marketplaces based in San Francisco."

David Rosenthal introduces himself and provides context for his perspective as a venture capitalist in the technology sector.

"Today we are talking about Google Maps and the acquisition of three companies starting with whereto technologies in 2004 that set the whole thing in motion."

The hosts outline the main topic of the episode, which is the story behind Google Maps and its foundational acquisitions.

• Google Maps is discussed as having a dual revenue model: serving as a front door to Google and selling API access.
• The hosts will explore how Google Maps operates as a business and its significance in the tech industry.

"Yeah, the dual revenue model as one being a different front door to Google than search, and two actually now selling that API access. But we will get into all of that and more."

This quote highlights the two main revenue streams for Google Maps, indicating the depth and complexity of its business model.

• Pilot is introduced as a sponsor, a company providing accounting, tax, and bookkeeping services for startups and growth companies.
• Pilot is described as the largest startup-focused accounting firm in the US, backed by prominent investors.

"Our next sponsor for this episode is one of our favorite companies and longtime acquired partner Pilot for startups and growth companies of all kinds."

The hosts mention the episode's sponsor, Pilot, and emphasize their role in supporting startups with financial services.

"Pilot both sets up and operates your company's entire financial stack."

This quote explains the comprehensive service offering of Pilot, positioning it as a one-stop-shop for financial needs of companies.

• The hosts invite listeners to join the Acquired community with over 2500 fans.
• They promote the Acquired Limited Partner (LP) show, which offers deeper dives into company-building topics.

"If you like the show, you should come join the other 2500 plus acquired fans that are hanging out in there."

The hosts encourage listeners to become part of the Acquired community, suggesting a sense of exclusivity and shared interest.

"David and I release one lp show for every main show, and we use these episodes to go deeper on company building topics."

This quote promotes the LP show as a value-add for dedicated listeners who want more in-depth content related to technology companies.

• The hosts discuss the history of Google Maps, starting from 2003, pre-IPO Google.
• They mention Bret Taylor, a key figure in the development of Google Maps, who later became a prominent tech executive.
• The acquisition of Where 2 Technologies by Google is highlighted as a pivotal moment for Google Maps.

"So we go back to 2003, relatively recent by acquired standards."

David Rosenthal sets the stage for discussing the history of Google Maps, indicating the focus on a more recent technological development.

"Bret Taylor moves over and becomes the first pm for this new team, which is rechristened from where to to Google Maps very inventive name."

Ben Gilbert explains Bret Taylor's role in the development of Google Maps and the rebranding of Where 2 Technologies after its acquisition by Google.

• The hosts discuss the technological innovations that enabled the creation of dynamic, interactive maps on the web.
• They explain the concept of map tiles and the use of Ajax (asynchronous JavaScript and XML) for dynamic web applications.
• The efforts of the Where 2 Technologies team to adapt their desktop mapping software to the web are highlighted.

"The map should not be static, but it should be dynamic and you could interact with it."

David Rosenthal summarizes the vision behind the interactive mapping technology that would become a key feature of Google Maps.

"They use this idea that was as best as we can tell, and they've talked about, and Google's talked about it kind of independently invented both by the Gmail team and Paul Bukite within Google and also where to while they're trying to get acquired by Google at the same time."

Ben Gilbert notes the simultaneous development of Ajax technology by both the Gmail team and the Where 2 Technologies team, showcasing the innovative environment at Google.

• The acquisition of Where 2 Technologies by Google and the subsequent launch of Google Maps is seen as a transformative event in the mapping industry.
• The episode concludes with a discussion of the broader implications of Google Maps on local business advertising and the evolution of web applications.

"So Google acquires whereto. Bret Taylor moves over and becomes the first pm for this new team, which is rechristened from where to to Google Maps very inventive name."

The hosts conclude with the final steps of the acquisition and the official launch of Google Maps, emphasizing its significance in the tech landscape.

• Pokémon GO is one of the most successful AR applications.
• AR is often considered an emerging market, but Pokémon GO represents the current extent of that market.
• Pokémon GO is an example of AR's potential for mainstream success.

"Yeah, for sure. It is funny, I think, when people talk about the emerging AR market, I think that's the widest used AR."

This quote highlights the significance of Pokémon GO in the AR market, suggesting that it is the most widely used AR application to date, indicating its success and the potential for AR technologies.

• Google acquired Zipdash for real-time traffic data.
• Zipdash's technology involved collecting and disseminating traffic data via mobile phones.
• At the time, traffic data was particularly relevant for mobile phone users while driving.
• Zipdash was acquired for a small amount, believed to be $2 million.

"Google also acquires a company called Zipdash, a very, very small company. I believe they paid $2 million for Zipdash."

This quote provides information about Google's acquisition of Zipdash, emphasizing the company's size and the acquisition cost, which was relatively low. It hints at the strategic value of real-time traffic data for Google's services.

• Google Maps launched in February 2005.
• The night before its launch, Google Maps was featured on Slashdot, resulting in high traffic.
• Despite the initial traffic, Google Maps did not immediately surpass competitors like MapQuest and Yahoo Maps.
• Google Maps gained significant usage over time through performance improvements and novel features.

"The night before launch it got slash dotted... they just get a ton of traffic."

The quote describes the event where Google Maps was featured on Slashdot, a popular technology news website, leading to a surge in traffic. This exposure was crucial for the initial visibility of Google Maps.

• Google added satellite imagery to Google Maps, which was a novelty at the time.
• The imagery was sourced from the Google Earth team, which came from the keyhole acquisition.
• Users were fascinated by the ability to view their homes from a satellite perspective.
• The feature was almost named "bird mode" but was ultimately called Satellite View.

"Go find my house, view it from a satellite. And that was the key thing that made sort of like the zestimate for zillow that it got."

This quote reflects the user excitement and engagement with the new satellite imagery feature in Google Maps, drawing a parallel to Zillow's zestimate feature, which also engaged users by providing personal value.

• Google Maps evolved with features like speed optimization and satellite imagery.
• The Maps API release in 2006 was a watershed moment, allowing developers to create mashups with Google Maps data.
• Padmapper was a notable Google Maps mashup used for finding apartments.
• Google Maps became the largest Internet mapping destination by 2006.

"Google takes over MapQuest and Yahoo and becomes the largest Internet mapping destination and provider in the world."

The quote signifies the moment when Google Maps surpassed its competitors to become the leading mapping service, highlighting the impact of its improvements and the release of the Maps API.

• Google acquired Vutool, which led to the development of Google Street View.
• The Ground Truth project aimed to use data from Street View to create Google's own mapping data, eliminating dependency on third-party providers.
• By October 2009, Google stopped using data from Tele Atlas and Navtech and relied solely on its data.

"Using that data, Google starts internally a project called Ground Truth... they are officially only using their own Google data for then."

This quote explains the strategic move by Google to become independent of external mapping data providers by leveraging its Street View data, marking a significant milestone in Google Maps' evolution.

• Google Maps was one of the few third-party services integrated into the original iPhone.
• Google also developed its Android operating system, which included Google Maps with turn-by-turn navigation.
• The introduction of turn-by-turn navigation on Android was a significant advantage over iOS, which lacked this feature at the time.

"Google Adds turn by turn navigation to who needs your Tom Tom anymore on Android?"

The quote highlights the competitive edge Google Maps gained by introducing turn-by-turn navigation on Android, which was a game-changer for mobile mapping services and posed a threat to traditional GPS device manufacturers.

• Apple launched its mapping service, Apple Maps, in 2012 with iOS 6, aiming to compete with Google Maps.
• Apple Maps faced challenges due to the complexity of building a mapping service from scratch and catching up with Google's years of development and data collection.

"Scott Forrestall... they are launching their own mapping service, Apple Maps."

This quote marks the moment Apple introduced its own mapping service, signifying a major shift in the competition between Apple and Google in the mapping and smartphone markets.

• Apple Maps was integrated into iOS 6 in September 2012, replacing Google Maps.
• Google Maps was removed from the iPhone, leaving only Apple Maps or third-party apps (excluding Google) as options.
• Apple Maps featured turn-by-turn navigation, but it was unreliable at launch.

"So when Apple Maps finally ships in September 2012 with the release of iOS six, Google Maps is gone." "Apple Maps did have turn by turn. But if you followed the turn by turn directions, you might not necessarily end up where you wanted to go."

The quotes highlight the significant change in iOS 6 where Apple replaced Google Maps with its own mapping solution, Apple Maps, which included turn-by-turn navigation but suffered from accuracy issues upon release.

• Apple issued an apology for the shortcomings of Apple Maps.
• Tim Cook recommended alternative mapping apps, including Waze.
• Google quickly developed a third-party Google Maps app for iOS, launched three months after Apple Maps.

"Within days of this happening, Apple apologizes. Letter from Tim Cook." "On December twelveth 2012... Google ships a third party application to the App Store of Google Maps."

The first quote discusses Apple's public apology for the issues with Apple Maps, while the second quote notes the rapid response from Google, which managed to create and release a third-party Google Maps app on the App Store within three months, highlighting Google's engineering prowess and the demand for Google Maps on iOS.

• The new Google Maps app for iOS achieved feature parity with Android's version.
• It was considered well-designed and was downloaded over 10 million times within two days of release.
• The app's success influenced other developers, including the Microsoft Office for iPad team.

"It's so good. It is complete feature parity with Android Google Maps, including turn by turn navigation." "Within two days, it is installed on over 10 million iOS devices."

These quotes convey the immediate success and high quality of the new Google Maps app for iOS, which matched the Android version's features and was rapidly adopted by users.

• The Google Maps app for iOS was developed by a small team in Kirkland.
• The app's backend was already developed for Android, facilitating a smoother development process for iOS.

"The whole API surface was already written for Android. We just needed to be really good iOS engineers and connect to the right services."

This quote explains how the pre-existing backend for Android allowed the small team to efficiently develop the Google Maps app for iOS, demonstrating Google's strategic advantage in having a robust and scalable backend.

• The episode underscores Google's engineering talent and resourcefulness.
• Google Maps has become one of the most downloaded iOS apps due to its well-architected backend and API.

"Nobody else could do this. Everything that they did with maps over the now 15 years that it's been around the incredibly architected back end and API surface..."

The quote emphasizes Google's exceptional engineering capabilities, which allowed the company to quickly develop a superior mapping solution for iOS, leading to widespread adoption and acclaim.

• Apple's original app used static tiles, while Google introduced vector maps for smoother interactions.
• Google Maps introduced a one-handed zoom gesture, enhancing user experience.

"Apple's app was connecting to an older backend that used the static tiles... Whereas when Google regained control over the front end... they could connect to their v 20 or whatever it was APIs that actually had the vector maps."

The quote compares the backend technologies of Apple's original mapping app and Google Maps, highlighting Google's advanced vector map technology that allowed for a more seamless user experience.

• The discussion includes historical context, such as Google's acquisition of Waze and the development of Google Wave by the Rasmussens.
• The episode touches on the evolution of mapping technology and related business models.

"Google buys Waze for $1.3 billion in June of 2013." "What did the Rasmussens do at Google after moving on? ... Google Wave."

These quotes provide historical insights into Google's strategic acquisitions and projects, such as the purchase of Waze and the creation of Google Wave, which were influenced by the same talent behind Google Maps.

• The episode is sponsored by Statsig, a feature management and experimentation platform.
• The acquisition of Where 2 Technologies by Google is categorized as a technology acquisition.

"Our sponsor for this episode is a brand new one for us, Statsig." "I think it's a technology acquisition with where to..."

The first quote mentions the episode's sponsor, Statsig, while the second quote classifies the acquisition of Where 2 Technologies by Google as primarily technology-driven, which was instrumental in the development of Google Maps.

• Google initially relied on locals passionate about improving digital maps for their area.
• These individuals were known as Google guides or Google local guides.
• A system was created where local guides earned points, and community leaders emerged to enhance maps for their region.
• This utilization of user-generated content (UGC) models allowed Google to amass significant data sustainably and at no cost.
• Google Map Maker is no longer in use, but the concept continues with community updates.

"They got a lot of their early data from relying on the passion of locals, who I think were called Google guides or Google local guides, who wanted to improve digital maps for their area."

This quote highlights the grassroots approach Google took in the initial stages of building its maps, leveraging local knowledge and enthusiasm.

• Lars discussed the challenges in recruiting engineers, as many doubted the profitability of maps.
• Even after Google's acquisition, skepticism remained regarding maps as a viable business.
• The potential of maps was not immediately recognized, with the true value emerging 15 years later.

"Lars, in that same talk, talks about how difficult it was for them to recruit to where to it was the four of them, they wanted to hire all of their engineering friends. They couldn't because everybody thought that they couldn't make money from maps."

This quote emphasizes the initial skepticism surrounding the profitability of maps, which posed recruitment challenges for the original team.

• Google Maps is seen as an example of why antitrust laws need to evolve.
• Despite being free for consumers and creating immense consumer surplus, Google Maps has become a near-monopoly.
• The acquisition of competitors like Waze and the built moat around Google Maps have raised antitrust concerns.

"Google Maps is a perfect example to me of the kind of thing that Ben Thompson has been talking about for a couple years now of like antitrust needs to evolve in the current environment because Google Maps has created so much consumer surplus."

This quote discusses the paradox of Google Maps creating vast consumer benefits while simultaneously building a monopoly, highlighting the need for antitrust evolution.

• Google initially captured 0% value from maps, raising the question of their current value capture.
• The discussion pivots on whether Google can now capture significant value from the immense global utility it has created.
• The concept of a fair trade in value capture is debated, with the aim of capturing a portion of the value created for customers.

"The way to sort of think about value creation, value capture is a fair trade, is to be able to capture 10% of the value that you create for your customers."

This quote introduces the concept of fair value capture, suggesting businesses should aim to capture a percentage of the value they provide to their customers.

• Google's mission is to organize the world's information, with maps organizing it geographically.
• Despite diversification, 84% of Google's revenue still comes from advertising.
• Maps offer a new inventory for existing advertisers to reach users, similar to the impact of Facebook acquiring Instagram.

"Google's mission is to organize the world's information and make it easily searchable. What maps does really, is it organize the world's information geographically."

This quote ties Google Maps back to Google's core mission, highlighting its strategic fit within the broader company goals.

• Google Maps is becoming a platform for local searches, with promoted pins and other features being introduced.
• The potential revenue from Google Maps as an advertising platform could rival that of Instagram.
• The API licensing aspect of Google Maps also offers significant revenue potential.

"It seems very plausible to me that there's 510 billion dollars of advertising revenue that Google could see come from the mapping product."

This quote speculates on the substantial revenue potential Google Maps holds as an advertising platform, comparing it to Instagram's success.

• The acquisition of mapping technologies by Google is graded, with Instagram being the gold standard (A+).
• The grading criteria range from F (money wasted) to A+ (enormous part of the business).
• Google Maps is considered an A due to its strategic importance and revenue potential, though it falls short of A+ due to higher maintenance costs compared to pure tech platforms.

"The reason why I think this is an a and not an a plus and you just compare it to Instagram is. Instagram is a pure tech business."

This quote explains why Google Maps, despite its success, does not receive the highest acquisition grade, due to the higher maintenance costs associated with its physical-world integration.

• A correction is made regarding Shopify's powered sales, which was $41 billion, not $14 billion.
• The potential for building large companies on platforms like Shopify and Google Maps is highlighted.
• The discussion includes the value capture of platforms, comparing Shopify's capture rate to that of Uber and Airbnb.

"Shopify actually only captures two and a half percent of the merchant sales as their own revenue, not the 7%, which admittedly is very different."

This quote corrects a previous error regarding Shopify's revenue capture and discusses the implications for the company's valuation and platform potential.