Google Acquires Nest Labs, A company founded by a former Apple Employee

The Internet giant Google has announced that it has bought Nest Labs, the maker of a family of iPhone-controlled smart thermostat and smoke and carbon monoxide detector devices for connected homes. Nest will continue to operate independently of Google and won’t share customer data with them. Nest was founded by the brilliant engineer Tony Fadell who used to work at Apple where he was charged with the iPod music player project.

Yes, the iPod Godfather now works for Google! The transaction is valued at a whopping $3.2 billion in cash. Google paid quite handsomely to buy Nest, didn’t they? Considering Nest raised about $80 million in venture funding, the acquisition qualifies as one of the most profitable exit strategies among Silicon Valley startups.

I Personally checked out the nest learning thermostat and was impressed with its sleekness and functionality, the $249 price point be damned…

A media release posted on the Google Investor website notes that the transaction, pending customary closing conditions and expected to close in the next few months, means“Nest will continue to operate under the leadership of Tony Fadell and with its own distinct brand identity”.

Big news! @Google acquiring Nest to help fulfill our goal of reinventing unloved home products. Nest will stay Nest. http://t.co/0L8hNBhmYc
— Nest (@nest) January 13, 2014

A post Tony Fadell (photographed below) published on his startup’s website calls Google “a rocket ship” that will help a great deal fulfill Nest’s vision of of the conscious home a lot faster. In May 2011, Google Ventures led Nest’s Series B round of financing, and in 2012, Series C.

Another blog post assures customers that Nest won’t share their data with Google:

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.

Was Apple interested in snapping up Nest Labs?

Re/code learned that Google was the only serious bidder so Apple “was not in the mix”.

Given that Google’s acquisition are for the most part meaningful (sans notable exceptions like Motorola Mobility) and that the search monster has worked quite well with companies it has acquired, there’s no doubt in my mind they’ll be taking Nest devices to the next level.

Also, this raises the question of platform superiority.

Nest has traditionally supported iOS devices first, but I’m guessing Android will now receive a first-class treatment (can you say, RIP iOS compatibility?).

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Thoughts?