Google's reach expands into your home more via $3.2 billion Nest acquisition

Nest gives Google some design know-how as well as a lot of home energy data. Google's tentacles are spreading into your home even more.
Written by Larry Dignan, Contributor

Google said Monday that it will pay $3.2 billion in cash for Nest, which makes smart thermostats and smoke alarms. Rest assured that Google is hoping to plug smart homes together with Android devices, its developer ecosystem and treasure trove of data.

nest pic

Nest launched in 2011 to strong reviews. Since its launch, Nest's smart thermostat has been replicated by larger players such as Honeywell.

Google CEO Larry Page said that Google is "excited to bring great experiences to more homes in more countries."

For Google, Nest founders Tony Fadell and Matt Rogers will bring some more design knowhow to the search giant, which has a hardware side of the business via Motorola. Fadell led the team at Apple that created the first 18 generations of the iPod and the first three generations of the iPhone. 


On the data front, Google could ultimately harness more information about individual homes and their energy usage. Nest, however, did indicate that home data would stay in its company under its privacy policy, which is owned by Google now, and only be used to improve products. Nest was poised to launch a developer program in early 2014. 

Consider the moving parts:

  1. Google has mobile access via your smartphones and various apps on multiple platforms.
  2. Google has multiple ways into your living room via Android and Chromecast, a streaming TV gadget, as well as tablets and PCs.
  3. The company had tried to monitor energy usage with utilities, but scrapped the plan in 2011.
  4. Google's Android will increasingly be in your car.
  5. And Google is working the robot market.

It remains to be seen how all of these efforts fit together, but it's clear that Google's tentacles are spreading.

Analysts said that Google's purchase highlights the importance of the connected home and Internet of things. Forrester Research analyst Frank Gillett said:

Google's acquisition of Nest affirms the growing strategic importance of the idea of the connected home. It also shows that Google increasingly believes in hardware/software solutions, such as Nest has built, rather than just building operating systems for other manufacturers to implement in smartphones, Chromebooks, and TVs.

In a blog post, Fadell said:

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.

Google has the business resources, global scale and platform reach to accelerate Nest growth across hardware, software and services for the home globally. And our company visions are well aligned – we both believe in letting technology do the hard work behind the scenes so people can get on with the things that matter in life. Google is committed to helping Nest make a difference and together, we can help save more energy and keep people safe in their homes.

Google and Nest are familiar as Google Ventures has been an investor in Nest. Fadell added that Nest will continue to have its "distinct brand identity."

Rogers posted an FAQ for nest customers and hammered home the distinct brand theme. Here's the excerpt:

Will Nest continue to support iOS so I can have the Nest app on my iPhone or iPad? Yes, absolutely. We’ll continue supporting iOS, Android and modern web browsers so you can check in on your home and control the temperature from wherever you are.
Will Nest and Google products work with each other? Nest’s product line obviously caught the attention of Google and I’m betting that there’s a lot of cool stuff we could do together, but nothing to share today.

What will happen to the Nest warranties on products? No change there – we stand behind our products like we always have.

Will I still be able to find Nest products at my local retailer? You bet. We intend to continue selling through the same partners in the US, Canada and the UK.

Will Nest customer data be shared with Google?
Our privacy policy clearly limits the use of customer information to providing and improving Nest’s products and services. We’ve always taken privacy seriously and this will not change.

Editorial standards