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Google Buys Nest

By - January 13, 2014

nestToday comes the news that Google is buying Nest, a move that, upon reflection, should have been obvious (the price tag of more than $3 billion, not so obvious!). If the company is truly executing its mission of helping us organize the world’s information and make it available, it makes sense to have a major play in the Internet of Things, in particular, those things that consumers view as extremely valuable. Nest, a company that has rethought the previously unsexy world of home control devices, is a perfect platform for launching computing devices that feed on valuable data, and tie seamlessly to Google’s other platforms, like Android, Nexus, Search/Knowledge, and more.

My first thought upon hearing this news was of Apple – if ever there was an Apple-like company, it’s Nest. Founded by an ex-Apple employee, Nest devices do for thermostats and smoke alarms what the Mac did for PCs – made them relevant and far more valuable. And Nest was in essence a design driven company – just like Apple. But it’s a sign of how sprawling Google’s ambitions are when compared to Apple, which I can’t imagine ever getting into home control systems, much less autonomous cars or robotics.

Google is proving itself willing to make huge bets in markets it believes will become drivers of tomorrow’s data ecosystem. Draped in that light, Nest seems an inevitable move. So what might be next? To answer that question, start with those things we view as super-valuable, but are not yet widely lit with computable information. Clothing? Cars? Healthcare? Food?! Well…why not?

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12 thoughts on “Google Buys Nest

  1. [...] the way, having taken a quick look at John’s take on the Nest buy…he has one detail right, but also wrong. Google won’t buy or get into the clothing [...]

  2. george says:

    I think Nest sells as many thermostats as Google sells Motorola smartphones at full price. Great purchase for Google if they leverage on TF’s design skills.

  3. Andre Buxey says:

    The future is here! Looking forward to what Google is going to do with the new tech they just aquired

  4. JG says:

    Another side to the story. Would be curious about your take on this counter-take, John.

    http://seattletimes.com/html/businesstechnology/2022669758_googlenestxml.html


    People should be wary of how much intelligence Google will be able to suck up and analyze once it completes the purchase of Nest Labs, said Jeffrey Chester, executive director of the Center for Digital Democracy.

    “Consumers should insist Google start making their mortgage or rent payments, given all the data the company plans to sweep up from everyone’s homes,” Chester said. “A few billion is digital chump change for the key to unlock more of our personal information. By linking together our mobile, video, search, while driving, in-store and now at-home data, Google wants to become an invisible but all-seeing new member of the family.”

    Marc Rotenberg, another frequent critic of Google, said he planned to return his Nest thermostat.

    “Being a genuine geek, that was no simple decision,” said Rotenberg, president of the Electronic Privacy Information Center. But, he said, he didn’t feel as if he had much choice. “Google doesn’t respect boundaries.”

    • johnbattelle says:

      I think it’s inevitable that our information turns to currency, and the sooner we have tools to manage that the better.

      • JG says:

        I get that our information becomes currency. What I lament is a lack of exchange rate between that and other forms of currency.

        To wit: I read an article a few weeks ago about how people would be willing to pay $5 (as opposed to $0.99) for a smartphone app that would respect their privacy. Why not something similar for this Nest smart thermostat? Give me the option to choose the $199 version of the thermostat, which version ties into the internet and sends all the data back to Google. And also give me the option to choose the $299 version that does not require me to sign up for yet another online account, that does not send data back to anyone, anywhere. In other words, if information is currency, then let me pay more currency to keep my information.

        I have no problem with information becoming currency. What I have a problem with is not being given a choice. Y’know?

        • johnbattelle says:

          The market for information is illiquid at best, so it’s hard to start it with an offer like that. Over time I think it will become normal, now, it’s needing some other catalyst.

          • JG says:

            You’re much closer to these sorts of markets than I am, so no doubt you are correct. I’ve just been asking for this normality, this conversion between privacy and USD, for.. what.. like 15 years now? I think I mentioned this in the comments to your blog back in 2006, but in 1999 or thereabouts, when Google started showing its first adwords ads, I wrote to them offering to pay a monthly subscription fee if I could get the service without ads (and also therefore without all the tracking that comes with an ads-based service). In other words, if I could exchange USD currency for information currency. Obviously I was ignored — my request did not materialize back then.

            But it has been 15 years now, and the market has still failed to normalize this exchange rate. I’m still not able to exchange dollar-for-information currencies. And I’m getting old here…when is it going to happen? I thought things were supposed to move fast in technology time, but it’s looking like it’s going to be another 15, if not 30, years before something like this becomes possible. Frustrating.

            Anyway, sorry for the rant.

          • johnbattelle says:

            It takes a generation, for sure.

          • JG says:

            A gener.. a generation? My android phone is obsolete six weeks after I buy it because a newer model has come out, and yet I have to wait 30 years to get the informationUSD currency exchange that I’ve wanted?

            Sometimes, don’t you just get the feeling that the tech industry is solving the wrong problems?

          • johnbattelle says:

            The hard ones come slow
            ###

            John Battelle

            Exec. Chair, sovrn Holdings
            Founder, Federated Media Publishing
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