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Google's new Nest

January 15, 2014

Google's price has climbed on the Nasdaq on news of the acquisition of smart thermostat and smoke alarm manufacturer Nest. The purchase brings in top-drawer ex-Apple gray matter, and more insight into consumers' homes.

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Nest Labs Gerät
Image: picture alliance/AP Photo

Shares in Californian technology giant Google climbed to $1,150.58 (841 euros) in Tuesday's trading, as the US Nasdaq market recovered most of its losses incurred on the previous day.

Google's 2.5-percent climb followed its announcement late on Monday of plans to acquire Nest Labs Inc for $3.2 billion. As part of the deal for the manufacturer of "smart" thermostats and smoke or carbon monoxide detectors, Nest's founders Tony Fadell and Matt Rogers will both continue their work for Google.

Fadell is known as "one of the fathers" of Apple's portable music player the iPod. Furthermore, he is also famed for convincing Apple's Steve Jobs of his design's credentials by piecing together the various components on the spot during a conference room demonstration - a trace of the showmanship Jobs was so famed for. Rogers worked with Fadell at Apple and was a lead software engineer working on the iPad.

"Google is buying itself near-instant - and much-needed - credibility in the world of hardware," specialist publication wired.com wrote of the acquisition. Prior to the Nest buyout, colloquially called an "acquhire" (acquire and hire) deal, Google's only major stake in the hardware market was its moderately successful takeover of cell phone maker Motorola Mobility.

Tony Fadell, Gründer von NEST
Fadell will stay on as part of the dealImage: picture-alliance/AP

Household devices, and data

Nest's debut product was a smart thermostat for households, designed to remember consumers' habits and preferences and then to adjust the temperature automatically. Nest says this "smart" technology can help reduce customers' energy bills. The company also manufactures a smoke detector intended to be less annoying than standard models, as it is easier to deactivate and offers a vocal warning before sounding a full-blown alarm.

This is all part of what's being dubbed "industry 4.0," or "the Internet of things," the gradual networking of dozens of devices in the manner that is already standard for computers, music players, smart phones and so forth. Some saw in Monday's deal another sign of Google's data-driven business model extending into people's homes.

"Oh p.s., with Nest's built-in sensors now Google knows when you're home, what rooms you're in, and when you're out. Just FYI," wrote technology expert Ryan Block of AOL on Twitter, while others joked about automated adverts for new fleeces, fireplaces, or even hosepipes appearing on the basis of thermostat or smoke alarm readings.

Nest's Fadell had in the past said his company understood that its devices gathered private consumer information, saying in December: "If somebody wants access to the data of a household, then they are going to have to come to me or my co-founder and offer a very good reason."

msh/slk (AFP, AP, dpa, Reuters)