January 17, 2014

Google acquires Nest Labs for $3.2 billion

Internet giant Google recently announced the $3.2 billion acquisition of Nest Labs Inc., the company behind a home automation product called the Nest Learning Thermostat that learns users' behaviors and preferences over time to reduce energy consumption and lower utility bills. 

According the Nest website, the thermostat builds a personalized schedule of ideal temperatures that can enable users to save an estimated 20 percent on their heating and cooling costs. 

This recent agreement — which came as a surprise to many — has left some people wondering what kind of value a company like Nest can bring to Google. According to IBNLive, this is Google's way of positioning itself as a leader in what experts call the Internet of Things. This essentially consists of everyday objects — anything from a thermostat to a toaster — that are connected to the internet so that they can function automatically without requiring human-to-computer interaction. 

Nest co-founder Tony Fadall shared his thoughts on the acquisition in a recent blog post, stating the following: 

"Google has the business resources, global scale and platform reach to accelerate Nest growth across hardware, software and services for the home globally. And our company visions are well aligned – we both believe in letting technology do the hard work behind the scenes so people can get on with the things that matter in life […] Together, we can help save more energy and keep people safe in their homes."

As evidenced by this recent deal, business acquisitions can provide technology companies with the resources they need to become leaders in growing industries.