Daimler Confirms Microsoft, Amazon in Talks to Invest in HERE Location Service -- Update
April 05 2016 - 9:35PM
Dow Jones News
By William Boston
BERLIN -- Germany's premium car makers Audi AG, BMW AG and
Daimler AG, which owns Mercedes-Benz, are in talks with Amazon.com
Inc. and Microsoft Corp. that could lead to the tech giants taking
minority stakes in the HERE digital mapping service, a senior
Daimler executive said.
The three auto makers, which make the world's leading premium
car brands, acquired the Berlin-based digital mapping service HERE
from Nokia Corp. last year for EUR2.5 billion ($2.85 billion) as
part of a bold plan to build a platform for self-driving cars
connected to the Internet.
Soon after taking control of HERE, the car makers began
approaching tech firms and other auto makers about joining the
venture as strategic investors.
"We are talking to Amazon, Microsoft and many auto makers,"
Thomas Weber, a Daimler board member in charge of research and
development, said in an interview late Tuesday. "We need a cloud
provider to handle the huge amounts of data created by HERE and its
users. We haven't taken any decisions yet."
Should a deal be concluded, which isn't certain, it would be a
major step in creating a global platform for connected cars that
links the engineering prowess of some of the industry's top auto
makers and information technology know-how of Silicon Valley.
Amazon and Microsoft could be natural allies for HERE as both
compete against Google in information services. German auto makers
have been wary of allowing Google to get too deep inside their
vehicles, fearing that they could lose control of data produced by
the car and its users and sacrifice potential profits.
"We've always said that we wanted to protect our independence,"
Mr. Weber said.
Mr. Weber said talks were still at an early stage and that a
decision about opening the digital mapping service to new investors
would likely be taken sometime this year.
HERE's other investors -- Audi and BMW -- acknowledged talks
with a variety of potential investors but declined to comment on
specifics.
Max-Morten Borgmann, a spokesman for BMW, said HERE's consortium
of investors always made clear they were interested in bringing in
additional partners and that they wanted to reduce their own
investment in the company.
"We have determined that there is a lot of interest in this, not
only from potential partners in the automobile industry but also
from interested parties in other industries," he said in an emailed
statement, declining to elaborate.
Amazon wasn't immediately available for comment.
HERE and Microsoft declined to comment.
HERE is developing a high-definition, real-time map that is seen
as a key component to wide deployment of self-driving cars and
connecting individual vehicles to each other and the Internet.
HERE is more than a conventional route-finding or navigation
service. The company is creating a high-definition, 3-D digital
representation of roads, highways and their surroundings that is
constantly updated as cars connected to the service upload data
about traffic, weather and road conditions to the cloud in real
time. That information then becomes available in real time for
other drivers.
Cars traveling in winter, for example, could provide information
about temperature and road conditions that could be shared through
the cloud with drivers coming up behind them, potentially improving
road safety. The service could also alert drivers to sudden changes
on the road, such as new construction or even accidents that a
static route-finding map wouldn't contain.
The ability to provide information about changing traffic and
road conditions in real-time is seen as a necessary step to develop
self-driving cars.
Amazon and or Microsoft could enhance HERE's service by
providing cloud services and big data analytics, needed to process
the huge amounts of data and transform that data into a basis for
profitable data-based services.
Mr. Weber said HERE's owners are also eager to have more car
makers on board as a way of enhancing the accuracy of HERE's
service. The more cars uploading data to HERE's cloud, the more
accurate HERE's location services become. That is why HERE wants to
have more big auto manufacturers locked in as investors to increase
the number of cars on the road that feed data to its cloud.
"In the future, we don't only want to utilize data that HERE
produces, but also data that is created by customers," Mr. Weber
said.
Earlier this year, Renault SA, the French car maker, and auto
supplier Continental AG said they were considering joining HERE as
strategic investors. Continental's rival Robert Bosch GmbH formed a
strategic partnership with HERE competitor TomTom NV, the Dutch
mapping service considered No. 3 after HERE and Google Maps.
Jay Greene contributed to this article.
Write to William Boston at william.boston@wsj.com
(END) Dow Jones Newswires
April 05, 2016 21:20 ET (01:20 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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