Google To Acquire Nest Labs For $3.2 Billion

Google is to acquire Nest Labs, best known for its smart thermostats and smoke detectors, for $3.2 billion in cash.

Google shared the news in a press release, saying that the deal is expected to close within a few months. The full release:

Google Inc. (NASDAQ: GOOG) announced today that it has entered into an agreement to buy Nest Labs, Inc. for $3.2 billion in cash.

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, have built a tremendous team that we are excited to welcome into the Google family. They’re 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 and fulfill their dreams!”

Tony Fadell, CEO of Nest, said: “We’re thrilled to join Google. With their 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.”

Nest will continue to operate under the leadership of Tony Fadell and with its own distinct brand identity. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US. It is expected to close in the next few months.

Google also tweeted the news, though that was really just a link to the release:

Google’s Sundar Pichai, who heads Google’s Chrome, Android and Chromebook efforts, welcomed the purchase on Twitter:

On Twitter, Nest itself tweeted that “Nest will stay Nest,” saying in full:

Nest also has a blog post up with a statement from Nest founder and CEO Tony Fadell — a former Apple executive known as one of the fathers of the iPod — saying in part:

Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone. We’ve had great momentum, but this is a rocket ship.

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. Google is committed to helping Nest make a difference and together, we can help save more energy and keep people safe in their homes….

In May 2011, Google Ventures led our Series B round of financing, and in 2012, Series C. Time and time again, Googlers have shown themselves to be incredibly like-minded, supportive and as big of dreamers as we are. I know that joining Google will be an easy transition because we’re partnering with a company that gets what we do and who we are at Nest –and wants us to stay that way.

In another blog post, a Q&A for Nest owners, the company says:

Will Nest customer data be shared with Google? 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.

That seems unlikely. For one, privacy policies are constantly evolving. But if Nest stays as a standalone business, it’s possible that it won’t share data gathered from its sensors with other Google operations. However, it seems fairly absurd to think that someday, Google’s not going to find a way to position such sharing as an enhancement for Google’s search or other services.

Indeed, another part of the Q&A hints at this:

Will Nest and Google products work with each other? Nest’s product line obviously caught the attention of Google and I’m betting that there’s a lot of cool stuff we could do together, but nothing to share today.

It’s not hard to imagine that data from your Nest product might, with your permission, flow into Google Now to give you automatic alerts.

The story is still developing, and you can find related coverage from around the web here on Techmeme. The purchase values Nest at about 1/4 the amount Google paid for Motorola’s mobile business.

Related Topics: Channel: Mobile Marketing | Google: Business Issues | Top News

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About The Author: is Founding Editor of Marketing Land. He’s a widely cited authority on search marketing and internet marketing issues, who has covered the space since 1996. Danny also serves as Chief Content Officer for Third Door Media, which publishes Search Engine Land and produces the SMX: Search Marketing Expo conference series. He has a personal blog called Daggle (and keeps his disclosures page there). He can be found on Facebook, Google + and microblogs on Twitter as @dannysullivan.

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  • Darren DeMatas

    Congrats, Matt!

  • http://wtff.com/ JustConsumer

    There are just 5 questions in Q&A for Nest owners, but still one is about privacy.
    If Google is involved, then privacy is a question )

  • steve

    Great! Hoping this drives down the cost of NEST thermostat.

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