“Microsoft is growing its global footprint again, this time putting a geographic stamp on Europe by buying Multimap, a leading British online mapping company, for an undisclosed sum…”
New York -- Continuing an ongoing string of acquisitions, Microsoft on Wednesday announced that it snapped up “Multimap,” one of Britain’s top providers of location and mapping services for Europe, North America, and Australia.
“U.K. online mapping company joins list of Microsoft’s recent acquisitions, including aQuantive, as well as deals with Facebook and Digg, Microsoft continues to make acquisitions to boost its online services and advertising strategy.”
“I think Microsoft is beginning to recognize that within the paradigm of regular Web searches, Google has things pretty well locked up, so now it is trying to move quickly into other areas,” said Matt Rosoff, an analyst with Directions on Microsoft. “They did a great job with their mapping service -- now it is just a matter of bringing it to users and enabling the advertising opportunities.”
The acquisition gives Microsoft powerful new location and mapping technology to complement its existing Virtual Earth, Live Search, Windows Live services and MSN, along with the aQuantive advertising platform it acquired earlier this year. The new technology could also be integrated with a range of other Microsoft products and platforms in the future, the company said.
“This acquisition will play a significant role in the future growth of our search business and presents a huge opportunity to expand our platform business beyond the U.K. and globally,” said Sharon Baylay, general manager of the Online Services Group at Microsoft.
“Terms of the deal were not disclosed, though a report in the UK’s Times Online suggested that the sum paid was about US$50 million.”
The Multimap purchase appears to be an acquisition that is as much about growing Microsoft’s customer base as it is about technology. Multimap, which was founded in 1996, is the second largest consumer mapping service in the United Kingdom, according to comScore.
“London-based Multimap provides street-level maps and point-to-point directions, as well as local searches that can help users find nearby businesses.”
The acquisition will give Microsoft a stronger foothold in online mapping in Europe, where it has lagged far behind Google and where Multimap is an established leader.
“Depending on which comScore stats you look at, Multimap is number one in the European commercial space and number two in the consumer space,” said Justin Osmer, senior product manager of Microsoft’s Live Search.
“Clearly there are synergies here,” Osmer said, explaining that the two companies’ mapping services already operate under similar business models.
Adding Multimap to its offerings could not only add traffic and European data, but also makes particular sense because of the company’s location-based technologies, Rosoff added.
Microsoft has already made significant investments without making much headway against Google in the realm of traditional search, so mobile search could be a new area of focus, he explained.
In an interview with InformationWeek earlier this year, Microsoft VP Satya Nadella, who runs the company’s search and advertising business, pegged local search and mapping as one of the priorities for Microsoft’s Live Search teams.
Multimap also has the data Microsoft and competitors are hunting down to fill in gaps as they expand their mapping and location-based advertising services worldwide. The company’s extensive roadmaps of Europe should help Microsoft there.
“Multimap provides the mapping services for the Web sites of more than 1,200 enterprises around the world.”
Multimap also brings Microsoft a fairly extensive list of corporate customers and potential advertisers for its own mapping services, including Hilton, Vodafone, Ford, Avis, and Wyndham Hotels and Resorts, and Virgin Megastores, among others. The company offers mobile applications, a store-finder service, asset tracking, and travel directions to corporations.
Multimap also has been using Microsoft’s Virtual Earth technology for about four years, Osmer said.
Mapping has also become a significant element in enterprise settings, as companies increasingly combine maps with other enterprise applications, David O’Connell, a senior analyst with Nucleus Research, said in a statement.
Google has already acquired a presence in the enterprise, which could be putting Microsoft on the defensive, he added.
“Google Maps is extremely powerful, and enables companies to expand their business intelligence applications,” O’Connell noted. “I think Microsoft is saying, ‘We need to be able to do something like this for our small to medium-sized businesses.’”
Founded in 1996, Multimap will now operate as a wholly owned subsidiary of Microsoft, integrated into the Virtual Earth and Search divisions of its Online Services Group.
Multimap has staff in the United Kingdom, the United States, and Australia, and Microsoft said it is not sure yet if those employees will stay where they are or move to other offices. The Multimap office in the United Kingdom will remain open and employees will continue business as usual there, the company added.
All of these efforts are part of a now two-year push to add services and content for its online brands to boost the revenue of its Online Services Business segment. To date, Wall Street analysts have said they are unimpressed by the growth of this segment, and Microsoft’s moves seem to be evidence the company is getting that message loud and clear.
In a broad sense, the acquisition is the latest thrust in Microsoft’s ongoing duel with Google. Google recently partnered with Dutch navigation-device maker TomTom to link Google Maps with TomTom’s GPS-enabled personal navigation products.
It is not a leap to think it will be merged with Microsoft’s technology at some point. The two companies offer very similar services to both consumers and businesses. And Multimap has recently introduced some new functionality, such as a service pointing mobile phone users to nearby wireless hot spots.
However, Microsoft’s Osmer said it is “a little early to tell” exactly how Multimap’s technology and interface will be integrated with Microsoft’s own Live Search Maps service and Virtual Earth mapping platform.
Microsoft shares rose 99 cents, or about 3 percent, to $35.09 in Wednesday trading.