Why has Google spent $2bn on a smoke alarm company?

Google is expanding its tech empire with the £2bn ($3.2bn) purchase of Nest – a home technology company.

The staggeringly expensive purchase is bound to cause a stir in the race to use gadgets to enhance and make our lives easier.

Nest is currently leading the way in developing products to automate the home. It has two products on the market and hundreds of filed patents for future development.

The company claims its flagship thermostat is intuitive and will learn your habits after you set it manually a few times – it could intelligently warm the house before you get home from work.

Google’s buy is the latest in the ever-lucrative ‘Internet of Things’ (IoT) movement, which is seeing automation of everyday tasks in an attempt to make our lives easier.

In the run up to acquisition the search giant will have looked at its competitors and realised it was falling behind in the automation stakes.

LG is already ahead of the curve having released its smart fridge, which will send a text message if you are out of milk. Meanwhile Microsoft has been working on a project since 2010 that aims to simplify connections between the management of electronic gadgets in the home.

For Google it is important to be seen as at the forefront of home technology and innovation. The willingness to stump up £2bn for a company not many people will have heard of shows how much value it places on automating our lives.

Products such as Google Glass, the wearable headset, give an indication of its ambition to embed technology into everyday life.

But the latest innovation isn’t the only consideration for customers when they’re deciding on what level of responsibility to give computers. Privacy issues continue to be raised about the amount of data we are giving companies about our lives.

Telling Google and Nest what time the heating is turned on (and off) lets them know about our routines, tells them how much time we are spending out of the house and indicates how much energy we are using. The more data about our lives the companies have the easier it is for them to target us with advertising.

While we are all for technology making our lives easier it’s reassuring that Nest co-founder Matt Rodgers quickly jumped to address privacy concerns writing on the company’s blog: “Our privacy policy clearly limits the use of customer information to providing and improving Nest’s products and services. We’ve always taken privacy seriously and this will not change.”


Image courtesy of Nest.