Google dropped something of a bombshell this afternoon when it announced that it will spend $3.2 billion in cash to acquire Nest Labs, which manufacturers connected thermostats and other gadgets for the home. Nest recently raised about $150 million in a deal that valued the company north of $2 billion, and is widely seen as a leader in a smart home industry that is just in its infancy.
Google has dipped its toes into this space before with the 2011 launch of Android @Home, as my colleague Jeff John Roberts noted this afternoon, but that initiative has yet to produce any actual goods or services. Google made a point of saying that Nest will continue to operate “with its own distinct brand identity” under co-founder and CEO Tony Fadell, but I think it won’t be long before Android spreads to Nest devices, which currently run the Linux system Google’s mobile operating system is built on. That should make it easy for Google to integrate Nest’s hardware (even if it does so under the existing brand), which gives the online search giant a big leg up in a very promising industry that is just beginning to get legs.