A Home Away From Search: Why Google Bought Nest

Written by Mike Olsen

Google on Monday announced its intent to purchase Nest Labs for $3.2 billion. Here’s why Nest and firms like it build Google a nice post-search home.

googlebuysnestbirdnestwikimediacommonsaNewDomain.net — Google on Monday announced its intent to purchase Nest Labs, manufacturer of the popular Nest Learning Thermostat, for a staggering $3.2 billion. Google’s interest in Nest should come as no surprise to Google watchers. Google’s already invested $100 million in the company. But why is it paying so much? And what’s it really getting?

Sure, Nest’s products stand out in terms of simplicity of design and ease of use. Co-founder and CEO Tony Fadell came from Apple, where he was the driving force behind the design for the original Apple iPod.

And yes, in buying Nest, Google gets a proven and talented team. But that’s not the nut of it, either.

Google is buying Nest because Nest is one of the few successful companies in the home automation space. That’s why it’s willing to pay such a premium price for the startup, a price worth 3.2 Instagrams.

Google’s post-search future is in consumer electronics. Look at the Chromecast streaming dongle, a product with beautiful design and extreme ease-of-use. More specifically, Nest accelerates Google’s push into the home space. In a blog post discussing the acquisition, Fadell explains straight out how and why Google will move home automation forward. He writes:

From the beginning, our vision was to create a conscious home. A home that is more thoughtful, intuitive – and nice to look at. No one had cracked the code and we were confident we could do it with the right product, the right team, and focus.

Fast-forward to today, and we are well on our way to achieving what we set out to do. Our products are loved by customers, best-sellers across major retailers and installed in homes around the world. We have partnerships with some of the largest energy companies in the country to help people save energy and money. We have a huge team of 25,000+ certified professionals who help install Nest in the US and Canada and our company has more than 300 employees spread across three countries.

So if things are going so well, why did we decide to partner with Google?

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.”

With the type of devices coming out of Motorola, the Google X projects and the purchases of companies like Boston Dynamics and, now, Nest Labs, Google chief Larry Page’s vision of a post-search Google is unfolding right before our eyes.

Driverless cars. Voice control. Robots. Home Automation. Wearable technology. Page sees a future where the mundane is automated and easier, where technology is both everywhere and out of the way. Google is angling to be there every step of the way — and make Google Search less a keystone of the business. Watch Google’s profile soar on Wall Street and among consumers in the months ahead as a result of this purchase — and expect other high-priced acquisitions in the same vein, soon.

For aNewDomain.net, I’m Mike Olsen.

Bird’s nest image credit: Wikimedia Commons

Based in Ann Arbor Michigan, Mike Olsen is a senior editor at aNewDoman.net. Follow his stream on Google+ and email him at MikeO@aNewDomain.net.