Google Acquires Nest for $3.2 Billion

Source:  NYTimes, Jan 2014

Google and Nest: Two Companies in the Business of Understanding You

Rather than thermostats, Nest’s key technologies were described by Mr. Fadell in an interview last November as “communications, algorithms, sensors and user experience, running over a network to the cloud.”

Nest is interested in how people behave inside their houses; the thermostat was just the first step to understanding that. Its sensors gave information about interactions; after that, algorithms on everything from user preferences to battery power were deployed to give people a sense of control they had not had before. As Mr. Fadell put it at the time, “we’re focused on experience.”

Google also has about $56.5 billion in cash, so Nest isn’t that much of a drain. Pile it up too much, in fact, and the shareholders may start asking for it back. Better to spend on perhaps the most valuable asset of our time: a better understanding of human behavior, in all its forms.

Related reading: NYTimes, Nov 2013

The key technologies are communications, algorithms, sensors and user experience, running over a network to the cloud. You have to go top to bottom, with knowledge not just of design, but of the device, the network, the data services, and back down to the sensors — and the battery life implications of all that. You need to have expertise at every one of those levels. Then we do a lot of analytics on products, sales and customer support.

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