Executive Summary:
MapQuest is an online mapping platform that provides location data through satellite imagery and maps.
The primary reason why MapQuest failed was that its product simply wasn’t as good as alternative mapping solutions.
What Is MapQuest?
MapQuest is an online mapping platform that provides location data through satellite imagery and maps.
People can use MapQuest to search for specific addresses, compare different amenities such as restaurants or gas stations, and plan their routes.
Additionally, drivers can receive real-time traffic updates (for instance through traffic cameras) and check whether they are within the local speed limit.
MapQuest also works together with Yelp to provide its users with more detailed descriptions as well as reviews about the locations it sends them to.
Users can, furthermore, compare and book hotels, rental cars, flights, and various activities thanks to MapQuest’s partnership with Priceline.
MapQuest itself even tries to inspire its users to explore by publishing travel-related content on its MapQuest Travel platform.
Apart from its consumer platform, MapQuest also has its own enterprise solution that allows other businesses to use its location data for their own platforms (by tapping into its API).
MapQuest can be accessed by visiting the platform’s website or by downloading any of its mobile apps (available on Android and iOS devices).
MapQuest was once the undisputed leader in the online maps industry but has since been overtaken by services like Google Maps. How it came to be and what ultimately led to its demise will be covered in the next few sections.
What Happened To MapQuest?
MapQuest, which is headquartered in Denver, Colorado, was launched in February 1996 by Barry J. Glick, Chris Heivly, Matt Probus, and Perry Evans.
Its history, however, dates back all the way to the 1960s. In 1967, R.R. Donnelley and Sons, a Lancaster, Pennsylvania-based Fortune 500 company created a cartographic services division that was focused on creating free road maps for gas station customers.
By the end of the 1970s, the company had risen to become the leading supplier of customer maps to various companies such as travel, textbook, or directly publishers. Throughout the 1980s, Donnelly began migrating those maps into computers which began to slowly penetrate households.
Many of those maps were created in conjunction with Barry Glick, a Geography PhD at the University of Buffalo. Donnelly even scored a partnership with Apple in 1993 to power the maps of its upcoming Newton device, which unfortunately ended up becoming a flop.
Despite the flop, Donnelly decided to spin off its cartographic services division into a separate company dubbed GeoSystems Global Corporation (GGC) in 1994.
Throughout the coming two years, GGC continued to generate substantial income via CD-ROM atlas products or the launch of a “Trip Planner” CD in cooperation with the American Automobile Association.
In order to further capitalize on the ever-growing web 1.0 industry, GGC decided to launch one of the world’s first-ever online maps. In February 1996, MapQuest was officially unveiled to the public.
The website became an instant hit and recorded more than a million visitors in its first month of existence. MapQuest was essentially the first consumer-focused interactive mapping site on the world wide web. Its first-mover advantage enabled MapQuest to grow extremely fast over the coming months and years.
GGC even raised some venture capital in January 1997 (from Trident Capital) to further accelerate growth. Donnelly ultimately decided to sell all of its shares in the company while Trident now had a 36-percent ownership stake.
Apart from securing more CD-ROM deals, MapQuest also found its way into mobile phones. In December 1998, it was chosen as one of the content providers of the PalmPilot, which launched the following year.
That year also proved to be one of the most eventful ones in the firm’s short existence. First, it changed its name to MapQuest.com Inc. to reflect the company’s new strategic direction, which was internet-first.
Then, in February, it filed to go public on the Nasdaq stock exchange. At the time, many young internet startups, amidst massive losses, chose to go public to further extend their run rate.
Thanks to the firm’s CD business, though, MapQuest had ‘only’ lost $3.2 million in 1997 ($7.6 million the year prior) on revenues of $21.4 million ($19.6 million in 1996).
MapQuest eventually went public in June that year and successfully raised around $50 million. At the time of the IPO, MapQuest’s market share of the online mapping industry, which included competitors like Microsoft’s Expedia (launched by Zillow founder Rich Barton, among others), was equal to 64 percent.
And just half a year after its IPO, in December, news broke that America Online, Inc. (AOL) acquired MapQuest for a whopping $1.1 billion in stock. The deal was supposed to enhance its ‘AOL Anywhere’ strategy, placing the platform at the centre of attention for everyone visiting the internet.
As a result of the acquisition, MapQuest would be placed within various AOL services such as Netcenter or ICQ. Over the coming years, MapQuest was reaping the benefits of its first-mover advantage. The company even grew into a top 50 most visited website by the early 2000s.
However, around 2002, competition slowly began to heat up. In March, Yahoo announced that it would stop displaying MapQuest data across its domains and instead rely on its own mapping service.
Then, in August 2004, Google entered the mapping game. A year prior, Google and MapQuest had just announced a partnership in which the latter would utilize Google’s AdWords program to display sponsored links.
But Google soon realized that being in the mapping industry would enable it to generate even more data, which it ultimately would use for its existing suite of products.
To get the mapping business off the ground, Google acquired Where 2 Technologies, which served as the foundation for Google Maps. Google Maps was eventually introduced in February 2005.
Meanwhile, MapQuest continued to add new features and announced more partnerships, for instance with the likes of BlackBerry. By the end of 2005, competition in the online market began to heat up. Apart from Google and Yahoo, Microsoft had also just announced its very own online map.
Eventually, MapQuest began playing catch-up to its competition. For instance, in March 2006, it opened up access to its location data via an API. Competing services from Google or Yahoo already offered similar products right from the start.
In order to focus on its core online business, MapQuest also laid off around 40 people from its publishing business in September 2006. The unit was primarily tasked with creating and distributing physical atlases and maps.
Despite its shortcomings, MapQuest was still the undisputed market leader by the end of 2006. That drastically changed at the beginning of the new year. Google decided to remove links to both MapQuest as well as Yahoo and instead promote its own mapping product.
In October 2007, MapQuest decided to completely revamp its product to drastically speed it up and add a few critical features, such as the ability to save routes, to catch up with its competitors.
MapQuest capped the year off with around 50 million monthly visitors while Google Maps was still a distant second, recording around 30 million users per month.
The firm continued to add more features as time passed. For example, it announced partnerships with the likes of Yelp to enrich the data it displayed. In spite of its best efforts, MapQuest was finally overtaken by Google Maps in early 2009 – and never looked back.
Around late 2009, rumours began emerging that AOL was looking to sell some of its online services, such as the previously mentioned ICQ as well as MapQuest. However, those rumours were soon put to rest and AOL actually even began pouring more resources into MapQuest.
In December 2009, for example, MapQuest added street view images (2.5 years after Google first unveiled them) and announced partnerships with the likes of Citysearch. Over the coming months, more integrations with platforms like OpenTable or OpenStreetMap would also be announced.
MapQuest also released its first iPhone app in 2010, three years after the phone’s initial release.
The platform, furthermore, branched out into other segments. In October 2011, for example, MapQuest introduced MapQuest Vibe, a neighborhood-discovery service that generates a score for each neighborhood in the United States. Later on, MapQuest launched a social discovery and curation platform for anyone that wants to find additional travel inspiration.
Interestingly enough, MapQuest also received a significant boost when, in September 2012, Apple butchered the launch of its own map product. CEO Tim Cook went as far as issuing a public apology and telling Apple customers to use competing services like MapQuest or Waze.
MapQuest even made its first acquisition when it purchased Everlater in November 2012. Five months later, it launched its very own travel social network dubbed MapQuest Travel, which was based on the technology MapQuest had acquired.
Despite the fact that MapQuest was allegedly a profitable company, its team of 100 people didn’t possess the stamina and networking power that more potent services like Google had. In May 2015, Verizon purchased AOL in a deal worth $4.4 billion. Rumours began to emerge that Verizon was looking to trim down AOL by selling off some of its businesses.
However, it took another four years until that became reality. In October 2019, MapQuest was sold to California-based ad-tech firm System1 for an undisclosed amount. The acquisition price was so low that Verizon wasn’t even obligated to disclose the purchasing price.
Meanwhile, analysts estimated that Google Maps alone was generating annual revenues of $1.9 billion to $3.6 billion. Throughout the coming years, MapQuest simply continued to exist without much public attention.
The first signs of life came in December 2021 when the company announced that it had acquired RoadWarrior, a subscription app focused on route planning for gig economy drivers.
Today, around 50 people are employed by MapQuest which continues to operate out of its Denver headquarters.
Why Did MapQuest Fail?
The primary reason why MapQuest failed was that its product simply wasn’t as good as alternative mapping solutions.
When Google Maps came out in 2005, it was built on a slew of superior web technologies called Ajax.
First of all, this meant that its product was performing much faster. People back in the day were joking that they would click on a MapQuest button and leave to make a cup of coffee – that’s how long it took to perform a simple request.
Meanwhile, Google’s Map results were quasi-instant. Google also offered a variety of other features that MapQuest didn’t possess and was slow to catch onto.
These included an integrated satellite view, Google’s Street View (released in May 2007, 2.5 years before MapQuest), a developer API, and dozens more.
In the case of Google and later Apple, they both own the rails, that is they’re the onramp into how consumers enter the internet.
Google, for example, removed both MapQuest and Yahoo’s map product from its search results in January 2007. Instead, it began heavily promoting Google Maps. The ever-growing search-demand also meant that more and more people were naturally exposed to Google Maps as time passed.
Google, much like with YouTube and its other web properties, also committed substantial resources into enhancing Maps. Moreover, unlike AOL, which itself slowly began to crumble, it didn’t necessarily need to monetize Maps right away.
As a result, Google Maps only had a very small and non-intrusive number of ads. MapQuest (even to this day) plastered its service with dozens of image and video ads, which tainted the overall experience.
Lastly, MapQuest also missed the mobile trend. While Google released an app for both Android (which it, again, owns the rails to) and iOS almost right after launch, MapQuest waited several years until it released a functioning mobile app.
Who Owns MapQuest?
To this date, MapQuest is still owned by AOL. The former internet pioneer acquired MapQuest for $1.1 billion in stock back in December 1999.
“MapQuest.com offers a terrific interactive service that consumers love,” said AOL President Bob Pittman at the time. “They have built a strong brand that is recognized as the place to turn for online maps and directions. This additional presence will advance our ‘AOL Anywhere’ strategy, making it more convenient for our members to get the directions they need, wherever they are.”
At the time, AOL was on a literal acquisition spree, using its propped-up stock price to scoop up compatible products and companies.
Those acquisitions were part of its ‘AOL Anywhere’ strategy where the firm offered anything from online chats to search and news.
MapQuest’s maps would consequently be integrated into Netcenter and ICQ, among other products.
Unfortunately, AOL never saw that vision through and eventually became one of tech’s greatest failures. Today, AOL is owned by private equity firm Apollo after previously being sold off multiple times.
