Google buying Nest Labs for $3.2B
The company's high-tech smoke alarms and thermostats learn homeowner's behaviour and are controlled wirelessly.
NEW YORK – Google will pay $3.2 billion to buy Nest Labs, which develops high-tech versions of devices like thermostats and smoke detectors, in its second-largest acquisition ever.
The search engine operator was an early investor in Nest Labs. It says the company’s Nest Learning Thermostat has been a “consistent bestseller.” The thermostat, which retails for $249, learns how inhabitants like their homes to be heated and cooled. Once it learns the consumers’ preferences, it automatically adjusts the temperature on its own.
Its Nest Protect alarm is intended to be less annoying than traditional alarms: when it detects rising smoke or carbon monoxide levels, it lights up yellow and speaks with human voice, giving consumers an option to turn the device off if there is no emergency. They can stop the alert by waving an arm. The Nest Protect costs $129 while an older smoke and carbon monoxide detector could cost $50 to $80.
Analyst Shyam Patil of Wedbush Securities said Google is positioning itself to offer products that work on the “Internet of Things” – specifically a “connected home” full of intelligent wireless devices that collect data and could be controlled with a smartphone. The “Internet of Things” is a global network that not only links computers, tablets and phones but connects everything from bikes to washing machines to thermostats. Last year Google introduced Chromecast, a device that lets users connect their TVs and mobile devices.
The deal is Mountain View, Calif.-based Google’s biggest since it closed a $12.5 billion purchase of Motorola in May 2012.
Nest Labs is based in Palo Alto, Calif. It was founded in 2010 by Tony Fadell, a gadget guru who helped design the iPod and original iPhone while working at Apple.
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