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Google is acquiring Nest

Google just announced that they will be buying Nest Labs, In. the makers of the Nest Learning Thermostat for a cool 3.2 billion dollars in cash.

Wow, that’s impressive, I love hearing what companies are offered as they are bought and sold, because I love comparing industries.  Nest, even though it promises to use less power, etc. is really just an expensive convenience alternative for a cheap device we all already use.  That being said I bought 2, because it was so nice to love my thermostat.  The convenience of turning the heat up when it’s cold on a Saturday morning from my phone while in bed is worth the cost to me any day.

It’s just fascinating to me that while Snapchat was offered and turned down 3 billion, a company like Nest is also worth ~3 billion.  Just look at the comparisons of the 2 companies and it is easy to see how Snapchat just can’t hold it’s value over time like Nest can.  Nest has proven it can sell consumers an old product that they rebrand with new functionality and we will spend 10 times more on that new product than the old existing product that has very similar functionality.  While not identical, both manage our room temperature.

Larry Page, Google’s CEO, 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, also 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.”

I’m really curious how this will turn out.  While Nest will continue to operate under Nest’s own brand name.  Hopefully Nest can give Google some pointers on what it will take to build great home hardware because the Nexus Q was a flop.

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