Google and Nest just announced that Google will be acquiring Nest for $3.2 billion in cash according to Google’s own official investor relations post. This is Google’s first serious acquisition in the whole connected home world that has caught the world’s attention. This is primarily because Nest is considered to be one of the pioneering companies in the world of IoT and connected home. Their smart thermostat learns your behavior, preferences and home’s thermal capabilities. It then adjusts itself to your personal preferences and usage in order to deliver the best experience for you while simultaneously saving you money. Not only that, they also collect a lot of data that you can see for yourself in order to understand how the thermostat is working for you.

Nest Thermostat

They also announced a new product called Nest Protect at CES 2014, which actually won lots of awards for its consumer-friendliness and safety. This product combines both a smoke alarm and a carbon monoxide detector in one. This new product will probably be their last that they release without Google’s influence, but both companies have made it very clear that the two companies will (for the meantime) remain separate. They stated, "Nest will continue to operate under the leadership of Tony Fadell and with its own distinct brand identity. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US. It is expected to close in the next few months."

Nest Protect

In addition to the acquisition of Nest by Google, the company was very pre-emptive in announcing that Nest device data will only be used for producing Nest products and services. This is a clear move to squash any user perception that an acquisition by Google will result in a sharing of users’ data with Google. Frankly, I don’t entirely buy this idea as being true because Google would not pay $3.2 billion just to take in the profits from Nest’s business or to grow Nest’s business with their corporate strength. Google is in the data business, and it would make a ton of sense for Google to eventually overtake Nest’s services and to continue to run them as they are run now but at the same time collecting user data to better understand their behavior.