Google Buys Tony Fadell’s Nest for $3.2 Billion, Nest Renews Commitment to Privacy

| Analysis

Some stunning Silicon Valley news to kick of the week: former Apple executive Tony Fadell's Nest announced Monday that Google has acquired the company for US$3.2 billion. In cash. What's extra curious is that Nest claims that the company will remain a separate venture and that customer data won't be shared, which begs the question of why Google would want the thermostat maker.


This has all the makings of serious intrigue. For one thing, there's the price tag for the deal. US$3.2 billion is a lot of money, even for Silicon Valley—even for Google. Walt Mossberg's new venture, Re/code, reported earlier in January that Nest was close to closing a $150 million round of funding in a deal that would have valued the company at $2 billion, but even that is a valuation based on potential, not it products and sales.

Then there's fit. It's doubtful that Google CEO Larry Page looked at its product line of search engine, creeper glasses, email service, driverless cars, and social networking ghost towns and said, "Man, what we really need is thermostats and carbon monoxide detectors."

I could easily see where Google would want to add what temperature I keep my house at to its remarkable profiles on we, the product, but Nest itself said:

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.

Things could change, of course, but that's a pretty straight-forward commitment to protecting customer data.

Then there's personnel. Google's main target for this acquisition could have been Tony Fadell and Nest's other talented employees, including Matt Rogers, the company's founder and vice president of engineering.

Nest has done some really cool things with what used to be very humdrum home appliances—the thermostat and smoke and carbon monoxide detectors—and the people that made that happen would be very valuable to any company, including Google and another little-known Silicon Valley firm called Apple.

Speaking of Apple, Re/code reported that Google was the only serious bidder for Nest, and that "Apple wasn't in the mix." This, despite the fact that Apple liked the company's products enough to sell them in its brick and mortar Apple Store locations.

It remains to be seen if that relationship continues.

Image made with help from Shutterstock.

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Even odds Google shuts them down inside 6 months


Coming soon - “We’re sorry we accidentally grabbed all the Nest user data.”
Count on it.


Privacy? BULL$H1T. Google will be marketing everyone’s personal data as soon as they possibly can. I’ll be looking for a new thermostat this weekend!


Hate to flog this horse again, but I’m going to flog this horse again. This Google purchase fits in with my prediction that this will be the Year Of The Sensors. I’m liking smart 3-axis gyros in cahoots with other smart sensors that will add contextual intelligence to devices - for example raising a device to your face would trigger a phone, pointing it at a TV makes it a remote; if it senses you’re in your car it makes you stupid,  note that the “device” could be a necklace or a wrist band or a glove.  Or in this case a smart steak knife that measures meat temp before you cut it, because cutting meat is a 3 billion dollar racket - No?


I’m with mactoid - I will be selling my Nest on eBay and reinstalling my old one for now.  For google, this year will be, as EVERY year is, the year of the data mining.  And I for one have no interest in supporting it.


We’ve been data mined since birth. You gotta some kind of simple person to assume you have any kind of personal stealth in the Internet world let alone the pre-web world. (not counting your birth & S.S.#) It started with subscription cards that would fall out of magazines and newspapers last century - that guy Al Neuharth founded USA Today later but he made his first million off of “data mining” via direct mail marketing with cheap postcards.  It sucks in general but all marketing is offensive on one level. OTOH, what is Google going to mine? At least they aren’t taking your money and PINs on Youtube etc. If you buy a product of Google’s then Duhhh you’re on the customer base. Now when HUGE BANKS like Target National and a bunch of other large department stores hemorrhage your personal PINS and card numbers well, again that sucks.


I’d thought about buying a Nest t-stat, but I have de-Googled my life as much as I can (Some friends still use gmail to contact me), and will never purchase one now.

IMO, what Google does (aggregating and selling users personal data) should be illegal.


Yup! The Nest just flew out of my plans. No home invasion shall go uncontested.


Cudaboy, I typically don’t correct people on their grammar, except when they attempt to insult me.  It’s “You’ve got to be some kind of simple person…”.  Not “You gotta some kind of simple person…”.  If you are going to insult me, please use proper grammar.  (Mike Wazowski).

I am not a simple person, and definitely not naive enough to think my privacy is safe anywhere.  But there’s a huge difference between subscription cards in magazines and google’s ‘business model’.

Your poor attempts to justify what google does are pretty sad.  There is a huge difference and I hope you understand this.  I would rather place what little trust I have of big corporations with a company that sells awesome hardware, software, and user experience, and that uses my personal data to improve its services, instead of one that mines and sells my data for other companies to abuse.  No doubt if I continue to use my Nest in 2014 google will sell my heating/cooling data to insulation companies, HVAC companies, and roofing contractors, who will start to bombard me with “we can save you hundreds of dollars in heating and cooling!!”  No thanks!!


There is more to sell than heating/cooling data. Data such as your schedule, when you or someone get home or arrive home. Who knows what other data will be incorporated into various home appliances. The possibilities for knowing all about you are tantalizingly endless.


Why does the thermostat need to be connected to the internet? Even a smart one that knows when you’re home and when you’re not?

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