Trying to Compete Against Google

The New York Times has a story today on how volunteers around the world are walking their communities to improve the data that’s available in online maps. The story does not mention CloudMade, a tiny startup founded in Britain and backed in Scandinavia by Sunstone Capital and Nikolaj Nyholm, an entrepreneur and angel investor who favors open source projects.

CloudMade is building tools that will make it easier for non-technical people to add data to OpenStreetMap, an open-source non-profit project similar to Wikipedia. OpenStreetMap’s goal is to map the world, but its tools are “geeky,” says co-founder Nick Black.

The 800-pound gorilla in online mapping is Google, which Black claims has been creating resentment in the mapping community as it takes over more and more functions that it used to delegate to partners. Recently, for instance, Google announced that it would create its own free map database rather than relying on commercial data and would offer free turn-by-turn navigation with Android phones, causing the stocks of some data providers to drop.

Also, Black says, Google owns its mapping data, even when that data is provided by volunteers, while data contributed to OpenStreetMap is owned by whoever provides it. CloudMade will make money by licensing access to its software to application developers and by splitting revenue with developers on location-based ads. The company is also in talks with network operators, navigation developers and handset manufacturers who want an alternative to Google, according to Black, and will announce partnerships soon.

A former archeologist who was once put in charge of surveying East Africa because he knew how to turn on a computer, Black believes there will be a big demand for maps — bicycle enthusiasts will want bike maps, historians will want maps that identify historically significant places, etc.

Google CEO Eric Schmidt said recently that Google would not make the same mistakes as Microsoft as it grows, and the company has never used the secret programming interfaces and other underhanded tactics that got Microsoft into trouble with the Justice Department.

But Google has gotten so big that it’s bound to create resentment. It’ll be interesting to see if CloudMade can convince a VC on Google’s home turf whether that trend is big enough to be worth backing.