Google Makes Strategic Move with New Acquisition

Allison Correia
Jan 20, 2014

Last week Google announced their acquisition of the connected device company Nest Labs for $3.2 billion. Nest, creators of the internet-connected thermostats and smoke detectors, is focused on the concept of an “automated home”. This acquisition is an interesting move for Google, and strategic in the way of strengthening their presence in the growing world of automation, as well as blurring lines between consumer and business technology.

Nest has been more successful than Google at getting into the home, with attempts through Google TV failing in comparison to Nest’s thermostats with shipments between 40,000 and 50,000 per month. This could explain Google’s interest in purchasing Nest. Another appeal in the product is that it can be adjusted from an App on a smart phone, which is an additional way to draw people to mobile devices that use its Android operating system. However an investment of over 3 billion dollars still seems like a lot for two products. Then I discovered the 100 ex-Apple employees Google got in the deal, adding even more value to this acquisition. Nest’s co-founder, Tony Fadell, is most commonly considered as the “father of the iPod”. He was one of the first engineers on the iPhone team at Apple and made a statement that his company and Google share a vision of letting technology work behind the scenes so people can focus on more important stuff.

We will have to wait and see how Google will extend its technology and advance in the home automation area, but we do know that they have not only gained some new products, but also a great deal of talent through their newest endeavor.


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