Very recently Google announced their acquisition of Nest Labs, the maker of high-tech thermostats and smoke detectors, for $3.2 billion. You may be thinking, “So what, Google bought some thermostats?” Well it’s actually a pretty big deal; to be exact, it is the second largest deal in Google’s history.
eMarketer reports that the average US adult will spend over 5 hours per day on the online. As the internet and mobile devices become part of our everyday every second lives, web-connected household appliances are in hot demand, and that is exactly what Nest Labs manufactures. Google has placed itself in a good position to be an even stronger household name with this acquisition.
(Don’t worry, we haven’t completely derailed, there are some talent acquisition nuggets in here too.)
Who doesn’t like talking strategy? This Forbes piece dives into the questions we might all be asking ourselves when it comes to buying a thermostat company for that amount of money. We discover that world domination is what Google is after. Just kidding, no but really, they want to establish a solid place in urban households worldwide.
Their stab at this goal with Smart TV wasn’t exactly what they had hoped, and then Chrome Cast with some success, and now they are hoping that Google branded, web-connected household appliances are the ticket.
We also find that this may be a match made in heaven. These Nest Lab thermostats learn a user’s habits and adjust the temperature according to those habits. These thermostats work on algorithms (Google’s jam) that can profile their user’s behavior and foresee temperature needs.
“Google’s Best and Worst Big Acquisitions” –ABC News
We get a different perspective here, when it is uncovered that Google has bought an average of one company per week since 2010, making Nest Labs one of hundreds. However, they also raise the question, “Why this departure from the norm of acquiring advertising and tech companies?” making Nest Labs one in a very few.
It turns out that this particular acquisition was less about Nest Lab’s product and more about their workers. This seems to be the first in a predicted trend of “aqui-hires”. Larry Page, CEO of Google indicates that this “tremendous team” is the reason for the acquisition. They aren’t buying a company; they are buying a team of talent.
Finally, the perspective we probably all jumped to when we learned that these household devices could learn their users’ behaviors and adapt to them –the big brother theory. This leaves consumers wondering what those little devices are tracking and reporting. Times reporter Verne Kopytoff said:
“Privacy is a big concern with Google’s acquisition, especially with the breadth of information that Nest devices can collect. Nest’s thermostat uses sensors, historical settings and algorithms to infer when people come and go.”
Whether it’s a conspiracy theory, an acqui-hire or an attempt at world domination, this acquisition sounds like it could mean great things for already-internet giant Google. While the mergers and acquisitions world is always a gamble, Google regards two thirds of its acquisitions as successes.
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