Hold on to your hats, folks. We interrupt this otherwise slow news day with some breaking news. Google today announced the acquisition of Nest Labs for US$3.2 billion in cash.
Nest Labs, of course, is the purveyor of the highly touted and well-received Nest Thermostat and, more recently, the Nest Protect smoke alarm.
Google's press release reads in part:
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."
There are a few factors that make this acquisition particularly interesting. For starters, Tony Fadell is a famed Apple engineer and executive who helped steer Apple to the tech mountaintop thanks to his incredible work with the iPod. A former Apple executive joining Google? That's big news.
Incidentally, Nest co-founder Matt Rogers is also an Apple alum, having worked on the original iPhone, the iPad and 10 generations of the iPod.
Second, and from a more practical standpoint, is the commonly held view that Nest Labs was an Apple acquisition just waiting to happen. Nest's Thermostat was largely viewed as an Apple-esque product insofar that it simplified what was otherwise a cumbersome and confusing activity. It may sound absurd, but the Nest Thermostat really worked to make home temperature automation seem cool, and more importantly, approachable.
Given that Fadell has deep roots at Apple and that home automation via mobile devices is becoming more prevalent, many assumed, or perhaps hoped, that if any company were to acquire Nest it'd be Apple.
But, alas, it was not to be. More so than ragging on Apple, one has to give credit to Google for going all in with Nest and ponying up $3.2 billion in cash. Apple of course has the cash for such an acquisition if it so chooses, but remember that Apple in its entire history has never even spent $500 million on a single acquisition. The notion that the company would now spend $3.2 billion for Nest Labs is, to be blunt, wishful thinking.
Lastly, and notably, Google in its press release writes that "Nest will continue to operate under the leadership of Tony Fadell and with its own distinct brand identity."
Well played, Google. Well played.