Link – Google Maps and Their Data Providers

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 is pretty easy to see who is being squeezed here. The data providers hold all the cards, but competition is driving the market and no one wants to be left holding the bag. One almost has to wonder though wen these data providers might strike back at Google/MapQuest/Yahoo! and start charging them more. For now they seem willing to undercut each other and maybe that business model will work. Still I have to wonder if NAVTEQ, TeleAtlas and other might look toward the fight that the RIAA is having with Apple and start wondering if they should start controlling more of the delivery of their datasets.