Verizon has sold MapQuest as the telecom company continues to shed parts of its media business.
Verizon has sold off MapQuest to the Venice, California-based ad-tech firm System1 for an undisclosed amount. Verizon acquired MapQuest through its $4.4 billion acquisition of AOL in 2015, and AOL acquired the company for $1.1 billion in 1999. Verizon said it did not file paperwork on the sale because the sale amount was not material.
System1 helps advertisers acquire users through search platforms like Google, Bing, and Yahoo, according to the company’s website. The 6-year-old company has raised $270 million.
According to Verizon, System1 is acquiring MapQuest’s website, mobile apps, and enterprise business from Verizon’s location-technology arm. Verizon said it would still be involved in MapQuest by creating location products and providing some technical support for the mapping site, a Verizon spokeswoman said.
“We believe this is a great opportunity for the MapQuest brand, the first digital mapping site on the internet, and the millions of consumers who rely on it every day,” Verizon said in a statement. “System1 plans to position, foster and grow the MapQuest brand as a more private alternative to other consumer mapping applications.”
In November, Verizon CEO Hans Vestberg reorganized the company into three groups: Verizon Consumer Group, Verizon Business Group, and Verizon Media Group. Then in December, Verizon disclosed in a Securities and Exchange Commission filing that it planned to write down the value of Oath by $4.6 billion.
Verizon owns HuffPost, TechCrunch, Yahoo, and Build. Verizon recently sold the blogging website Tumblr to WordPress owner Automattic Inc. for less than $20 million, according to Axios.
MapQuest has an advertising business but faces competition from Google and Apple
MapQuest says it reaches 38 million monthly unique users. Advertisers can buy display ads, sponsored routes, and map layers that overlay ads on top of the site’s mapping technology. On Tuesday morning, Comfort Inn & Suites and Holiday Inn were running ads on MapQuest’s website that directed consumers to nearby hotels in New York.
MapQuest has for years faced big competition from Google Maps and Apple Maps, which are built into Android and iPhone smartphones, respectively. In 2015, MapQuest said it had 40 million monthly users and be profitable, The Washington Post reported.
“It has to be a distraction — there’s no growth in there,” an advertising executive close to the MapQuest sale said.
According to a recent note by the RBC Capital analyst Mark Mahaney, Google Maps is becoming a bigger moneymaker for Google, in addition to its core search and YouTube advertising business. Mahaney estimated Google Maps would add $1.9 billion to $3.6 billion to Google’s revenue by 2021.
Mahaney also wrote that Google controls 80% of the navigation-app market, between Google Maps and its driving app Waze. Google Maps controls 67% of the market, while Waze controls 12% of the market, and MapQuest controls 8%.