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Uber makes $3 billion bid for Nokia's mapping service

As Nokia reinvents itself, the company is looking to sell off some assets, which includes its mapping service HERE.

By Tess Danielson , Staff Writer

According to three anonymous sources with the New York Times, Uber is supposedly offering up to $3 billion for Nokia鈥檚 mapping service, HERE. This follows reports by the Wall Street Journal that three German automakers, BMW, Audi, and Daimler鈥檚 Mercedes-Benz, have banded together to make a bid for the service with the Chinese search engine Baidu.

HERE is Nokia鈥檚 take on step-by-step directions. While some consumers may be unfamiliar with it, one source with WSJ described it as 鈥渢he most advanced digital mapping service in the world.鈥

Second only to Google鈥檚 service, Nokia has invested 鈥渉undreds of millions of dollars鈥 into mapping software to keep it as up-to-date as possible from year to year. Creating a reliable mapping service is time-intensive and expensive, and Nokia has generated a valuable archive of resources for data companies and self-driving cars. It also doesn鈥檛 hurt that the company holds 80 percent of the global market for built-in navigation systems.

Uber currently relies on a combination of its own mapping data and Google Maps, the latter of which it depends on more heavily. Acquiring HERE would not only give Uber the opportunity to free itself from Google鈥檚 mapping licenses, but also assist in its expanding cab sharing service uberPOOL.

Analysts told NYT the buyout would give Uber 鈥渁ccess to a fully established digital mapping business.鈥 Additionally adding that since its cab sharing service works using geospatial-mapping data to pair riders with drivers, obtaining HERE would be like hitting the jackpot.

鈥淚t鈥檚 extraordinarily difficult to get this type of mapping data,鈥 Jamie Moss, an analyst at the technology research company Ovum in London, told NYT. 鈥淥ther than Google, HERE is one of the few companies that can offer this data right now.鈥

Uber has also made it known that it partnered with Carnegie Mellon University to create the Uber Advanced Technologies Center in Pittsburgh, which will focus on 鈥渞esearch and development, primarily in the areas of mapping and vehicle safety and autonomy technology.鈥 While Uber experiments with autonomous sensors, it will need a team completely devoted to updating its mapping services for a driverless car to be fully functional and safe. HERE would take over this heavy lifting.

But Uber will be facing the deep pockets of the automobile industry. Fear of Silicon Valley, particularly Google, Apple, and Facebook, possibly looking to make a grab at HERE, caused the German auto manufactures, who are major clients of the digital maps, to band together. Uber stepping in with such a hefty offer likely sent a shiver down auto executives鈥 spines.

NYT went on to report that a source close with the dealings said the carmakers were threatening to discontinue using HERE if the service was sold to a corporation such as Facebook or Uber. Though, the companies have allegedly changed their tone, 鈥渇earing such threats could lead to suspicion they are building a cartel.鈥

While Microsoft and Facebook have both expressed some soft interesting in acquiring HERE, as NYT notes, no one in Silicon Valley has yet to make a public bid to Nokia. (Though, there is an unnamed private equity firm reportedly eying the service.)

Even if Google has not tossed its hat into the ring yet, its experimentation with driverless vehicles and its dominant position in the mapping industry appears to have inspired the German auto world to react with a better-safe-than-sorry approach.聽

But in the end, no entity may end up gobbling up the prized Nokia asset.

While Nokia is expected to announce the future of HERE by the end of May, according to Nokia chairman Risto Siilasmaa, the company may not even sell its mapping service.

鈥淚鈥檇 like to stress that the review will not necessarily lead to selling of HERE,鈥 Mr. Siilasmaa said at the company鈥檚 annual shareholder鈥檚 meeting earlier this week, explaining there was no predetermined outcome. 鈥淲e strongly believe in the possibilities to develop HERE also as part of Nokia.鈥

Talk about the ultimate tease as corporations begin placing their bets on the future of autonomous vehicles and the mapping industry.