Google’s latest purchase takes it deeper into people’s homes and lives and the world of consumer electronics.
It is buying Nest Labs, the maker of smart thermostats and smoke alarms. The price is $3.2 billion (2.34 billion euros).
The deal gives the world’s largest online search engine a stepping stone into an important new market at a time when consumer appliances and internet services are increasingly merging.
It is Google’s second largest acquisition since it bought mobile phone maker Motorola for $12.5 billion in 2012.
“Nest Labs appears to be focused on thermostats and smoke alarms, but it’s not far-fetched to see Google expanding this technology into other devices over time,” said Shyam Patil, an analyst at Wedbush.
“Home automation is one of the bigger opportunities when you talk about the internet of everything and connecting everything. This acquisition furthers their strategy around that,” he said.
Nest gained a large following with its first thermostat – a round, brushed-metal device with a convex glass screen that displays temperature and changes colour to match the wall it is attached to. It also tracks usage to automatically set heating and cooling temperatures.
Reuters reported some commenters on Twitter expressed concerns about the privacy implications of the deal for Google, which collects lots of personal data about its users’ online habits.
“Not content with your personal data, Google now wants your home data by buying Nest,” read a Tweet by Irene Ng.
“So basically Google will know when homeowner is away, when they’ve had a fire & what the power bill is?” Tweeted Brian Makas, who appended the hashtag #creepy to his comment.
Nest’s chief executive Tony Fadell said the company spent a lot of time discussing privacy issues with Google during talks that led to the deal.
“The reality of the situation is inside of Google they take privacy so incredibly seriously you have no idea,” Fadell said, noting that Nest’s terms of service would not change after the deal.