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Google Acquires Smart Thermostat Maker Nest For $3.2 Billion

Jan 13 2014, 4:21pm CST | by

 
 
 

Three years after redefining what thermostats are capable of, Palo Alto-based Nest is being bought by Google for $3.2 billion.

“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,” according to a blog post by CEO and cofounder Tony Fadell.

Fadell also said Nest will remain its own distinct unit.

Google has attempted several times in the past to gain access to “connected homes” type systems–including its own thermostat–but this is a huge move for the Internet giant in this field. Smart and connected devices are expected to be a huge market in the next few years. Apple reportedly working on new wearable technology to counter Google Glass, was rumored to be interested in buying Nest. Two of Nest’s cofounders–Fadell and Matt Rogers–are former Apple employees. Fadell is considered the father of the Apple’s iPod media player.

This announcement follows the release of Nest’s second product, a smart smoke detector called the Nest Protect.

“Nest’s founders, Tony Fadell and Matt Rogers, have built a tremendous team that we are excited to welcome into the Google family,” said Google CEO Larry Page in a statement. “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!”

Recode reported earlier this month that Nest was close to raising $150 million in a Series D round, evaluating it at $2 billion. Altogether, Nest has raised more than $200 million.

This acquisition is also another serious move for Google into the hardware space. Three years ago, Google bought Motorola Mobility for $12.5 billion.

“With the acquisition of Motorola and Nest, it’s showing that Google believes in the Apple vision: Create hardware, software solutions, not just an online platform,” says Forrester analyst Frank Gillett.

Here’s Nest cofounder Matt Rogers talking about what he learned about marketing from Apple: 

Source: Forbes

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