Google to acquire connected home device maker Nest for $3.2B

Google(s goog) announced on Monday that it’s in the process of acquiring Nest Labs, a home-automation company known for its digital thermostats and smoke alarms. The proposed purchase for $3.2 billion, which is to close in coming months, will give the Silicon Valley giant one of the hottest names in energy-management technology and product design, and comes at a time when Google is also expanding its presence in robotics, energy and internet-of-things (IoT) technology.

The search giant announced the news in a blog post:

Nest’s mission is to reinvent unloved but important devices in the home such as thermostats and smoke alarms. Since its launch in 2011, the Nest Learning Thermostat has been a consistent best seller–and the recently launched Protect (Smoke + CO Alarm) has had rave reviews.

Larry Page, CEO of Google, said: “Nest’s founders, Tony Fadell and Matt Rogers, … [are] already delivering amazing products you can buy right now–thermostats that save energy and smoke/CO alarms that can help keep your family safe. We are excited to bring great experiences to more homes in more countries..”


The release added that Nest would retain its own brand identify, and that it would continue to operate under the leadership of Nest CEO Tony Fadell (you can see a video of Fadell speaking at Gigaom’s recent Roadmap conference below).

In its own blog post, Nest described the deal as “coming home” noting that “Google has been in the mix in some way or another for about three years of our almost four-year history.”

Fadell said he is “thrilled” to join Google in the blog posts, but has also suggested he is attuned to the data implications of Nest — which collects information about consumers’ domestic activities — being rolled into Google’s giant data collection.

“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,” Fadell stated in a message to TechCrunch.

For Nest, the Google takeover will provide it with protection from larger competitors like Honeywell who have been attacking the startup with patent lawsuits. It also gives the company the financial means to continue scaling; as my colleague Katie Fehrenbacher reported in early January, Nest was on the hunt for more funding to launch new products and weather the lawsuits.

Nest Protect

The Nest acquisition isn’t the first time Google has dabbled in the internet of things space: The company announced an ambitious initiative dubbed Android @Home at its Google I/O developer conference in 2011, at the time saying that it wanted to launch internet-connected light bulbs in cooperation with Lighting Science. However, those products never saw the light of day. Still, there has been chatter that Google has continued to invest in the connected home space, and judging from Linkedin profiles, it looks like the Android @Home initiative is alive and well within Google.

Google, which requires a huge amount of power to keep its servers running, has long had an interest in energy efficiency. And, as we reported last fall, the company has been quietly experimenting with a smart thermostat project called EnergySense.

The Nest acquisition also comes on the heels of Google’s acquisition of robot-maker Boston Dynamics, and after Google Ventures poured $258 million into ride-sharing service Uber last year.

Here is Fadell speaking at Roadmap last November: