Google To Pay £2bn For Home Electronics Start-Up Nest

Google has announced plans to acquire intelligent home electronics developer Nest Labs for $3.2 billion (£2bn) in cash and expects to complete the deal in the next few months, giving the search giant the means to physically enter people’s homes.

“They’re already delivering amazing products you can buy right now–thermostats that save energy and smoke/CO alarms that can help keep your family safe,” said Google CEO Larry Page. “We are excited to bring great experiences to more homes in more countries and fulfill their dreams!”

Home invasion

Founded by former Apple executives Tony Fadell (who reportedly didn’t get along with Jony Ive) and Matt Rogers in 2010, Nest develops just two household devices. The Nest Thermostat is full of sensors that can establish the number and location of people in the house, and alter the temperature accordingly. Meanwhile, the Nest Protect smoke detector can tell its users the exact location of a possible fire.

Headquartered in California, the company says its mission is to reinvent the “unloved” categories of home appliances and turn them into beautiful, networked devices.

Fadell, who previously worked on the hardware design for the older iPod and iPhone models, first met Google’s Sergey Brin at a TED conference in 2011. Later, Nest devices proved to be  popular with Google employees, and Google Ventures invested heavily in the company.

After the acquisition Nest will remain a separate entity, led by Fadell, its current CEO. It will also continue to support iOS devices, despite the fact that Google competes with Apple in the mobile operating system market.

Nest will also keep its customer data separate from Google’s databases. “We’ve always taken privacy seriously and this will not change,” promised Rogers. “We know you entrust your homes and information to us and are committed to protecting that the same way we’ve always done.”

It is not clear what Google plans to do with the new property, and it seems even Nest employees are scratching their heads. However, combined with Google’s speech recognition and other cloud technology, the deal could result in a number of completely new types of home electronics.

“Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone. We’ve had great momentum, but this is a rocket ship,” said Fadell.

“The news today that Google has purchased Nest Labs shows that 2014 is clearly going to be the year of IoT (Internet of Things),” commented Pontus Noren, co-founder and director of Cloudreach.

“Cloud will be the binding factor that’ll underpin IoT. It’s no coincidence that Google, one of the biggest players in the cloud market, has entered the consumer electronics market with such a big leap. Companies looking to embrace IoT must engage with experts in data storage and utilisation early in the decision making process, to create a consolidated, elastic and centralised data landscape to support these innovations.”

This is the latest in a series of recent acquisitions, which has seen Google purchase seven highly successful commercial robotics laboratories, including Boston Dynamics, in the space of just six months.

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Max Smolaks

Max 'Beast from the East' Smolaks covers open source, public sector, startups and technology of the future at TechWeekEurope. If you find him looking lost on the streets of London, feed him coffee and sugar.

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