Latest News: Technology |  Celebrity |  Movies |  Apple |  Cars |  Business |  Sports |  TV Shows |  Geek


Filed under: News


Google Buys Nest, The $3 Billion Distraction

Jan 15 2014, 8:51am CST | by

10 Updates
Google Buys Nest, The $3 Billion Distraction
Photo Credit: Forbes


Recommend Your Tweet as Top Tweet:

Full Story

Google Buys Nest, The $3 Billion Distraction

One of the most surprising things about Google and its purchase of Nest is the price. Over $3 billion! That’s what you’d pay for a fast growing social network. But seriously, Nest hardly has the kind of defensible technology with massive barriers to entry that justifies a $ 3 billion outlay.

With customers like utilities the market will remain fragmented globally, because the majority will opt for local product champions. This felt to me a bit like Google’s fiber investments. So some argue it’s about data or a home platform. Here on Forbes, Parmy Olson opted for data:

“We know how many people are home during those times,” he (Nest CEO Tony Fadell) said “We know which homes have cooling, we can go through the data and we can say we believe we’re a five megawatt power generator or 10 megawatts in this county. That’s what we can deliver – 50-60% of the energy that was consumed in that window has been shifted away.”

Google is one of the kings of innovation. In a league table of innovators that I published earlier this week Google ranked 2 in the world, scored by innovation capability. The reasons why have nothing to do with its sometimes misguided acquisition strategy (think Motorola). Much of it came down to its extraordinary platform and ecosystem skills. So back to Nest. believes one of the big catches is Nest co-founder Tony Faddell:

Fadell is an engineer with demonstrated mastery over all aspects of the hardware process, with a high-design sensibility to boot. From supply chain and components to fit and finish, Fadell has shown he can manage a product for a company with Apple’s global reach.

Strange how the credit for revolutionizing Apple’s business is now being more widely distributed. The big question though is, does he do platforms and ecosystems the way Andy Rubin does?  Because with Rubin Google is doing things that make a lot of sense.

In its wide range of acquisitions Google has some impressive platform plays. Remember WAZE, a platform for consumer-driven insights and information on real-time traffic data. Lending Club - well that peer-to-peer lender is now accepting capital from the banking system making it an interesting hybrid lands platform. Google is an investor.

But the Android model is surely Google’s second major disruptor after ads. In autos Google just set up the Open Auto Alliance , an echo of the Open Handset Alliance that laid the foundation for Android in smartphones. Cars though are a small market, topping out at under 100 million new products a year.

Far more important is the robotics arena where Google looks poised to be the major participant in an Android style platform,  in a market that we will measure in billions of products.

Some people, including Venture Beat, are calling Google’s entry into robotics a moonshot – but in fact it looks more like a second Android.

Create a platform around a common robotics operating system, and maybe even find indirect ways of monetizing different classes of robot, accelerate robotics in autos, goods handing and delivery, personal assistance, hey maybe even make it, eventually, the home OS.

Ex-Google engineers started Willow Garage where the open source ROS resides. Google has now purchased two companies with close Willow Garage links , Redwood Robotics and spin-off Industrial Perception. Google collaborates closely with Willow Garage in facilitating Android apps for robotics.

(By the way, some of Willow Garage’s latest work is in remote presence. Sounds like fun, a kind of tactile Facebook?).

Unlike in self-driving cars where Google is up against a system of car-makers and road infrastructure, in robotics it is fairly greenfield and nobody knows how to accelerate a greenfield ecosystem like Google does.

Set against this, Nest is another hardware purchase, an area where Google has struggled.

$12. 9 billion spent on Motorola is turning to dust, the one hope being that Google can create a ecosystem for modularity in smartphones with Project ARA (just as the smartphone is fragmenting into wearables – interesting!).

From search engine optimization and Ad Words onwards Google’s genius has lain in ecosystems and peer groups. Nest is hardware with some data possibilities in an environment that will draw in competition from every consumer electronics company out there currently nursing frail balance sheets. Don’t look to Nest, look to robotics, Project ARA, Lending Club, WAZE and more instances of Google the catalyst.

Follow me on Twitter @haydn1701 or join me on Facebook. I am here on Google

Source: Forbes


You Might Also Like


Sponsored Update

Update: 10

MRCB, Nusa Gapurna and PKNS settle suit over RM3 billion PJ Sentral project

Source: Malaysia Today

(The Malaysian Insider) – Malaysian Resources Corp Bhd (MRCB), Nusa Gapurna Development Sdn Bhd (NGD) and PKNS Holdings Sdn Bhd have reached an out-of-court settlement over t ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 21 2014, 2:53am CDT


Update: 9

Story behind Syed Mokhtar’s ‘RM2.25 billion tax-exempt’ Bernas deal revealed, says PKR MP

Source: Malaysia Today

(The Malaysian Insider) – An innocuous written reply in Parliament has provided a peek into the cosy relationship between the Najib administration and Malaysia’s best-known businessman, Tan ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 15 2014, 12:56pm CDT

More From the Web

Update: 8

Constitutional monarchy still murky concept

Source: Malaysia Today

After the RM4.5 billion land sale, the Sultan of Johor secured a 15% stake in MOL Access Portal (MOL) for RM396 million and took a 20% stake in Berjaya Times. ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 14 2014, 12:37am CDT

Update: 7

Sultan of Johor’s RM4.5 bil backlash?

Source: Malaysia Today

49th Karlovy Vary International Film Festival
Has Sultan Ibrahim of Johor’s succession of big money deals over the last six months caused the tide of public opinion to turn against Johor’s royal palace? KiniBiz examines the.. ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 11 2014, 8:49am CDT

Update: 6

Putrajaya denies carpet dealer given interest-free loan

Source: Malaysia Today

Eileen Ng, The Malaysian Insider Putrajaya today refuted allegations that Bank Rakyat had allowed carpet dealer Deepak Jaikishan to repay a RM32 million loan without interest following interv ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 11 2014, 5:44am CDT

Update: 5

Malaysia Spends Over $9 million on MH370 Hunt: Report

Source: NDTV

49th Karlovy Vary International Film Festival
Malaysia has so far spent about RM27.6 million (over $9 million) on search operations for missing Malaysia Airlines flight MH370, an of ...
Source: NDTV   Full article at: NDTV Jun 9 2014, 3:12am CDT

Update: 4

Bill for Kidex likely to soar to RM3.4b

Source: Malaysia Today

The original RM2.4 billion tag on the proposed highway did not take into account the cost of acquiring the land mostly in the urban areas, claims an assemblywoman Fabian Comelius,. ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 9 2014, 2:51am CDT

Update: 3

MACC: No elements of graft in Bank Rakyat’s loan to businessman

Source: Malaysia Today

BET AWARDS '14 - Red Carpet
(Bernama) – The Malaysian Anti-Corruption Commission (MACC) found no elements of corruption in Bank Rakyat’s RM32 million interest free loan to a businessman. MACC in a state ...
Source: Malaysia Today   Full article at: Malaysia Today May 31 2014, 9:33am CDT

Update: 2

IHH Healthcare posts 25% rise in 1Q earnings to $62 mil

Source: The Edge Singapore

IHH Healthcare Berhad announced that revenue grew by 8% y-o-y to RM1.8 billion ($703 million) for 1Q2014 ended March, as earnings grew 25% YoY ...
Source: The Edge Singapore   Full article at: The Edge Singapore May 29 2014, 11:29am CDT

Update: 1

Hasan Malek evades media over RM32 million Bank Rakyat loan scandal

Source: Malaysia Today

Elizabeth Zachariah, The Malaysian Insider The minister embroiled in the RM32 million Bank Rakyat loan scandal refused to take questions from the press today at an event in Kuala Lump ...
Source: Malaysia Today   Full article at: Malaysia Today May 28 2014, 11:42pm CDT

Shopping Deals


<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.




blog comments powered by Disqus

Latest stories

Candace Cameron Bure, Andrea Barber Steal Stamo&#039;s Phone At Coulier&#039;s Wedding
Candace Cameron Bure, Andrea Barber Steal Stamo's Phone At Coulier's Wedding
Candace Cameron Bure and Andrea Barber's prank earned the attention of social media.
New leaked iPhone 6 Parts Reaffirms huge Redesign
New leaked iPhone 6 Parts Reaffirms huge Redesign
It’s not exactly a mystery at this point: Apple’s next-generation iPhone 6 and “iPhone Air” phablet will feature a huge redesign that represents a big departure from its current iPhone 5s and 5c models. According to...
Now you have another reason to avoid Samsung smartwatches
Now you have another reason to avoid Samsung smartwatches
Android Wear has the mobile development community very excited, but the hardware might not be ready for primetime quite yet. Reports have begun to circulate stating that the charging mechanism on Samsung...
Electric Cars are the New “IN” Thing in Formula E
Electric Cars are the New “IN” Thing in Formula E
Electric cars are indeed the new “in” thing on the motor sports scene.