Google has paid $3.2 billion to buy a company that makes high-tech smoke alarms and thermostats. The purchase of Nest suggests Google wants to have more involvement in non-traditional Internet-connected devices.
Nest launched in 2011 with a Wi-Fi controlled thermostat system. Although you can program it or manually alter it in the same way as a standard system, Nest will learn your pattern of activity over time and automatically adjust the heating based on the times you are around and the level of heat you prefer. It also uses rooms sensors so it can turn down the heat if nobody is at home. And you can use a smartphone to remotely turn up the heating, for example if you’re heading home earlier than usual.
Last year it launched a smoke and carbon monoxide alarm that initially gives a spoken warning when it detects a problems, the idea being that you have a chance to turn it off before getting the full-blown alarm, for example if you’ve just burnt some toast. The spoken alarm will also tell you where in the house the problem is. The system also emits a glow when you turn the lights out at night: green means everything’s fine, while yellow means the batteries need changing. You can also get an alert on your phone if the alarm goes off, or set up an emergency contact (which will only get alerted once the full-blown alarm is going.)
Google has had some involvement for most of Nest’s operating period, most notably organizing two rounds of venture capital fundraising. Although it’s a complete buyout, the company will remain running as a separate entity with the same staff and management.
Officially the buyout is meant to bring two main benefits from Google: offering technical expertise and bringing marketing opportunities to promote the products. It also means Nest can expand without the pressure that comes from public investors to continually maximize profits and avoid risks.
It’s what Google gets from the deal that may be more interesting. Many analysts think it’s got its eyes on the technology Nest uses to have its various sensors and devices communicate with one another, for example the fact that the smoke alarms can still exchange information even if your Wi-Fi network goes down.
Google could also be interested in the thermostat system from an energy-saving perspective. A few years ago it ran a project called PowerMeter designed to make better use of the data from smart energy meters, for example offering personalized energy-saving tips.
And of course, it’s hard to avoid the more cynical possibilities such as every time you turn the heating up, your Google ads get filled with promotions for sweaters and thermal underwear.