Google Finalizes $2.3 Billion Purchase Of Nest

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In a regulatory filing with the SEC today, Google Inc (NASDAQ:GOOG) revealed that it completed its purchase of Nest on February 7, 2014, mere hours after receiving approval from the Federal Trade Commission. The timing of the move essentially sees Google moving away from smartphones and into smart homes within a very short time frame.

Google moves further into the physical world

Co-founders Tony Fadell and Matt Rogers (both ex-members of the original iPod team) will continue operating the company under its own brand with Google Inc (NASDAQ:GOOG)’s permission. Google Glass, Chromecast, and Chromebooks will be joined by Nest’s products to give Google a more physical presence not only in the world but where people spend the bulk of their time outside of work, the home.

When the deal was announced that Google Inc (NASDAQ:GOOG) would both acquire Nest and have its employees take over its core hardware group, it made a bold statement that it was moving into the world and wanted the best to do so. Having developed the original iPod is not something that many can put on their CV, and Nest brings two founders who can make this claim. Additionally, when Fadell and Rogers founded Nest they steadily recruited a stream of Apple engineers to the smart thermostat and smart smoke detector maker.

It’s a question of privacy for many

It also raised a number of privacy concerns from the start. Will your thermostat be sharing information to Google advertisers? At least for now, the answer is no. The company intends to keep its own privacy agreement and promises that any changes to it will be both transparent and opt-in.

Not everyone is convinced. “Google likes to know everything they can about us, so I suppose devices that are monitoring what’s going on in our homes is another excellent way for them to gather that information,” said Danny Sullivan, a longtime Google analyst and a founding editor of Search Engine Land. “The more they’re tied into our everyday life, the more they feel they can deliver products we’ll like and ads.”

“That was a major concern or question we had, and they have done an amazing job of convincing us that our privacy policies are going to be well-respected in their organization,” said Nest co-founder Fadell.

Sullivan still isn’t convinced, “History has shown that privacy policies do change.” He added, “They won’t hand over Nest data to Google Inc (NASDAQ:GOOG), and Google mines it for whatever they want, but there could be incentives or reasons why it might make sense to tie it to a Google account.”

Privacy issues aside, it remains a done deal.

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