Google Buys Nest for $3.2 Billion in Cash

Google now owns a little piece of Apple. Today, Google announced that it's spending $3.2 billion to acquire Nest, a successful home hardware tech startup founded by Tony Fadell, the father of the Apple iPod.
Nest CEO Tony Fadell is now a Google employee. Photo Ariel ZambelichWIRED
Nest CEO Tony Fadell is now a Google employee.Photo: Ariel Zambelich/WIRED

Google is getting its house in order.

Today, the web giant announced that it's spending $3.2 billion to acquire Nest, a successful home hardware tech startup founded by Tony Fadell, one of the fathers of the Apple iPod.

Today, Nest makes internet-connected thermostats and fire detectors, but the plan is to extend its reach even further into the home. In a Google blog post, Fadell said that, with Google's support, "Nest will be even better placed to build simple, thoughtful devices that make life easier at home, and that have a positive impact on the world."

The announcement sparked much discussion across the web, as many joked about Google+ integration with Nest's products and Google Ads showing up when you turn off your smoke alarm. But according to a statement Fadell delivered to TechCrunch, Nest will only use customer information for "providing and improving Nest’s products and services," indicating it will not be used for Google's larger advertising schemes.

That said, Google could certainly use Nest data to hone its online ads and other web services, changing its behavior according to when you're at home and even where you happen to be in your home. The company's Google Now service is already privy to such information.

Earlier this month, Nest raised more than $150 million in funding after being valued at $2 billion. The startup made a name for itself with the Nest thermostat, which you can control over the net. The device learns from your behavioral patterns, adjusting itself in an effort to keep you comfortable and save money on your utility bills. Then, in October, Nest introduced a smoke detector that uses verbal and light cues to tell you when it's low on batteries or when carbon monoxide levels are dangerously high.

The acquisition is yet another way Google is moving into the hardware game. In mid-2012, it acquired Motorola Mobility, through which it sells smartphones and other devices. It offers the Chromebook Pixel, a machine that run its own Chrome OS operating systems. And it sells the much-praised (and super cheap) Chromecast dongle for new-age TV viewing.

The company isn't always successful with its hardware ambitions -- witness the Nexus Q -- but it will keep moving forward. In very big ways.