Google Maps and Their Data Providers

Never assume it’s easy to bring a free API to fruition. Check out Google Maps as web app versus Google Maps as API. Notice something different about the two maps? The former has “map data (c) NAVTEQ” whereas the latter has “map data (c) TeleAtlas“. In the past, both API and consumer maps credited both companies, but it’s a safe bet that Google has had a battle with NAVTEQ to offer their free API. The provider changed occurred around October 4 and prompted a discussion on the developer list about the greater number of errors in the TeleAtlas tiles (e.g., “In Tele Atlas you don’t get the Statue of Liberty. In Navteq you don’t get the bridge that goes to Ellis Island”, ” it
labels “Holy Ghost” Hospital in Cambridge which changed its name in
1988 to Youville Hospital”).

For comparison sake, Yahoo! have only NAVTEQ on the consumer and API maps, although “API” is perhaps too strong a word for the current Yahoo! offering. MSN Virtual Earth have NAVTEQ on the front end and their back end APIs, though their back end is strongly coupled to their MapPoint Web Services product which is commercial. The absence of a commercial offering from Google might be the sticking point–they’re all about the free.

The problem is that NAVTEQ spends a lot of money to get the most accurate data on the streets and roads, and they make most of their money selling routing (directions) through in-car navigation systems. I bet NAVTEQ wish they had a dollar for every time a prospective customer came to them expecting Google Maps-style driving directions to be free. Oh wait, they do. Every set of driving directions you get from Google Maps (or Yahoo! Maps, or MapQuest) represents real money in the pocket of NAVTEQ–they charge per route. Google, Yahoo!, MapQuest, and others are all eating those charges when they offer the service to you for free, planning to make it back on advertising and related travel services.

It would appear (and I’m reading this from the outside, as neither Google nor NAVTEQ can talk about their negotiations with each other) that NAVTEQ doesn’t mind the traditional model of portals paying to offer consumers driving directions. What they’re not comfortable with is offering free API calls. The biggest threat to a data business is free access to the data, at least that’s how NAVTEQ must see it. A free API like the Google API lowers the perceived value of the data.

What’s interesting is that TeleAtlas appear to be comfortable with that model. In the US, NAVTEQ is the big company, TeleAtlas the upcoming challenger. Those of you familiar with The Innovator’s Dilemma will know that it’s hard for incumbents to innovate outside their existing product line. In particular, they can’t turn their cash cow into steaks. If you’re fighting for business, though, you don’t have the burden of an existing business model to protect.

The trend is towards the commoditization of geographic information and services. Maps are already perceived as free because they’re available for free as applications and services. Geocoding is edging toward freedom, with routing hot on its heels. I’d love to be a fly on the wall at the Google, Yahoo!, MapQuest, Microsoft, et al. negotiations with their data providers to hear the conversations around those services.