Microsoft/Vexcel and NAVTEQ/ One Acquisition Integrated, One Just Announced

By Adena Schutzberg

The beginning of the week saw two big announcements related to geospatial technology and business. Microsoft rolled out Virtual Earth 3D, its new in-browser (Internet Explorer 6/7 only) app built from Vexcel technologies, and NAVTEQ announced the acquisition of traffic collection and distribution firm, The two events highlight the old saying that data are the fuel that keeps geospatial applications running.

Virtual Earth 3D

Virtual Earth 3D received a lot of early praise after its release on Tuesday.
  • It's not a stand-alone app (like Google Earth), though there is a 5 Mb download of a browser plug-in.
  • The cities look great. They include 15 now: San Francisco, Seattle, Boston, Philadelphia, Los Angeles, Las Vegas, Baltimore, Dallas-Fort Worth, Atlanta, Denver, Detroit, San Jose, Phoenix and Houston. More than 100, including international cities, are expected by summer 2007 and perhaps 5,000 in five years.
  • The integration of Vexcel (announced in March) was quick and apparently effective.
  • Hovering billboard ads (technology acquired from in-game company Massive, acquisition announced in May) reveal how the app will make at least some of its money.
  • Microsoft offers a developer API for the 3D environment similar to its existing one for Virtual Earth.
The most detailed explanation of how Microsoft created the VE 3D models appeared in New Scientist. It explains how staff used aerial imagery and GPS-stamped ground-based shots to create the models. Harris Corporation’s press release explains how it processed Pictometry obliques to create its RealSite 3D urban city models which are featured in the new release. Each cityscape requires about 10 million photos.

What is the significance of this latest 3D world? Microsoft staffers ticked off a few ideas:

Stephen Lawler, general manager of the Virtual Earth group, put figures to the process. c|net paraphrased him this way: "The process cuts down the cost of building 3D environments to hundreds of thousands of dollars from more than $1 million."

Virtual Earth chief architect Gur Kimchi, speaking to New Scientist, went out on the limb where many have gone before: "This is basically the end of the paper map."

Journalists, experts and bloggers offered these thoughts:

Elinor Mills at c|net pointed to the billboards. "The virtual billboards bring online map advertising to a whole new level. Currently, other mapping services feature either text ads to the side of the map or ads in pop-up windows or bubbles."

Greg Sterling, founder of Sterling Market Intelligence, echoed what Microsoft has said for some time. "There will be a way to navigate the internet visually. With the rise of these visually rich environments you've got video online, more graphical richness, more visual information."

Search Engine Watch's blog notes that the new product re-establishes the name confusion in the mapping products offered by Microsoft.
MSN Virtual Earth was announced back in May 2005 (see MSN Virtual Earth To Take On Google Earth). Virtual Earth was to feature "bird's eye" views of buildings.

MSN Local Search (with "flat" aerial maps) launched in June 2005.

MSN Virtual Earth launched in July 2005 but without the bird's eye images.

MSN Virtual Earth became Windows Live Local in December 2005 and gained the bird's eye images. The former "Virtual Earth" name (which was excellent) got sucked up by Microsoft’s turning all of its search properties into the Live brand. Virtual Earth only survived as a "powered by Virtual Earth" mention on the Windows Live Local site.

Now "Live Local" is being reduced to simply "Live" or "Live Search" but Virtual Earth is coming back, at least in the press release, as "Virtual Earth 3D."
Michael Pegg, of GoogleMapsMania, spoke to the Mercury News about the potential of 3D visualization.

"Think about the aging population, think about people with disabilities, think about gridlock. With baby boomers getting older, a large population of people will be losing their mobility, and this could be the best thing for them.'"

While there is some disappointment that the application requires newer hardware and a Microsoft browser, Microsoft can again be applauded for laying out the business model with the technology. Further, the visual impact of the images cannot be overemphasized. The response of the mashup developer community, as well as high expectation-filled GIS users, will be seen in the coming weeks. Next week, by the way, the world expects to get its first hands-on experience with ESRI's ArcGIS Explorer, which also offers some kind of 3D visualization.


No one to whom I mentioned NAVTEQ's $179 million planned acquisition of seemed too surprised. It was announced on Monday followed by a conference call with executives of both companies. NAVTEQ had been working with as a partner since 2004, and the fact that traffic information is the most requested "add-on" to satellite navigation systems made the acquisition seem very reasonable.

There are a few points worth noting about this acquisition.

Judson Green, CEO of NAVTEQ, highlighted during the call some of the licensing restrictions the company ran into when offering its partner's data to clients. That's a valid reason a distributor of data may also want to be the owner of those data. It's been noted in the past that many of the restrictions on mapping APIs eventually track back to the data providers. I'm not suggesting there should be no limitations, but simply that NAVTEQ, as owner of the data, will now have some say on those restrictions. makes most of its money now via ad-supported media (radio, TV). That traditional media market for traffic data is expected to grow just 3% per year. NAVTEQ wants to move that percentage of income from 90% now to about 50% in the future. How? By offering traffic data subscription services via the Web, wireless phones and nav systems. The market for traffic information from nav and phone systems is expected to grow at hundreds of percent in the next five years.

Traffic data, like stock data, are dynamic. Their value depends on how fresh the data are. Dynamic data are the new frontier in mapping, in contrast to the relatively slow moving additions and changes in city streets and housing developments. Weather, many believe, will be the next dynamic data provider of interest to geospatial data companies. Traffic and weather depend heavily on sensors to provide the current situation. In the future it may be the prediction of traffic that's a service of interest. now offers real time traffic information in 50 U.S. metropolitan areas. Twenty-two of those areas use its proprietary sensor network, enhanced with reported data from local and state departments of transportation. It also has substantial experience in advertising, which may help NAVTEQ in that arena.

I expect we'll be seeing more acquisitions of core geodata collection firms. Microsoft bought Vexcel. GlobeXplorer acquired AirPhotoUSA. What will Google buy? Will ESRI expand beyond partnering with data companies? Stay tuned.

Published Friday, November 10th, 2006

Written by Adena Schutzberg

If you liked this article subscribe to our newsletter...stay informed on the latest geospatial technology

© 2016 Directions Media. All Rights Reserved.