Plot twist: Apple allows Google buy all of these companies, then... buys Google, integrating maps and search, killing off Google+, and using its cloud services for iCloud.
Next: Apple goes after Amazon.
Stay tuned.
The circle must be whole...
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Google Acquiring Tony Fadell-Founded Nest for $3.2 Billion
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The circle must be whole...
Google makes money from advertising services, not hardware. This is why Android is free and Nexus devices and Chromebooks are not sold for profit.
Soooo, expect to hear a 5 second ad the next time you want to turn on the heat in your house.
Soooo, expect to hear a 5 second ad the next time you want to turn on the heat in your house.
Actually, this is brilliant. Google will know when your house is cold, so they can start sending you advertisements selling warm beverages and clothing.
Not really interested in giving the Googleplex detailed information about my energy usage, thankyouverymuch.
YMMV, but probably not.
YMMV, but probably not.
But Wall Street obviously doesn't care. Google can get away with overpaying because they're the darlings of tech these days. No way that would work for Apple.
Unless you count Motorola, which is still hemorrhaging cash at an alarming rate by any sane standard, and the patents that came along with it have added up to basically nothing thus far.
This exactly. Google no doubt sees this as another component of the "we're everywhere" initiative that the Chromecast and self-driving cars are both part of.
But the fundamental problem with Google is that we, the end users, are not the customer of almost anything they sell. We are the product. We're being given a service in order to data mine us so that we become a more valuable product to be packaged and sold to Google's advertisers. Absolutely everything Google has done for the past several years has been in service to that end.
The potential for Nest to improve Google's product value is tremendous--they already know what it's searching for and who it's emailing, they're working to know what it's watching on TV, and now they'll know when the product is at home, what its physical habits are, what temperature it likes its living room, how often it burns dinner. I'm sure they'll halve the price to make it more appealing, and make it link constantly with your smartphone to figure out who's in which room of the house when you're at home.
Currently I browse to a luggage site and every other Adsense ad I see for the next three weeks is for that luggage site or a competitor. Now they'll know to advertise sweaters if I keep my house cold during the winter, or vacation stuff if I'm not at home for a few days, or food if I'm sitting in the kitchen right now.
It's really a very smart acquisition from them--it's spreading their ad reach into the one area they currently didn't have any coverage.
Also, really--Google already bought a company that makes robots for the military. If they're not planning on building Skynet, I have no idea what their endgame is.
Mmm. The next big thing. Because we spend all day with thermostats and smoke detectors in our pockets.
Yes, home automations is just thermostats and smoke detectors
Disney bought Marvel for four billion and just Avengers and Iron Man have made 2.7 billion worldwide. It's not hard to see how they'll make their money back and more.
Obviously Google thinks the Nest technology and talent can potentially go into a number of new products since they'd never make back that 3.2 billion just on selling smoke detectors and thermostats. I wonder if nest has products in development that Google was excited about or if they're just using their imagination.
Regardless, it's hard to feel bad for Apple not trying to outbid this. For 3.2 billion it seems like they could develop their own products that are as good as these or better.
Or maybe the nest folks have some patents that Google sees a lot of value in?
Obviously Google thinks the Nest technology and talent can potentially go into a number of new products since they'd never make back that 3.2 billion just on selling smoke detectors and thermostats. I wonder if nest has products in development that Google was excited about or if they're just using their imagination.
Regardless, it's hard to feel bad for Apple not trying to outbid this. For 3.2 billion it seems like they could develop their own products that are as good as these or better.
Or maybe the nest folks have some patents that Google sees a lot of value in?
Mmm. The next big thing. Because we spend all day with thermostats and smoke detectors in our pockets.
That's the point. Automation! You completely missed it.
3.2 billion for a company that makes smoke detectors and thermostats? what's the worth of Honeywells thermostat and smoke detector division then? 300 billion?
Don't get me wrong, I have a Nest and it's great but 3 billion?
Ah, but it is not the thermostats or the hardware sales that is appealing to Google. It is the data they will be able to mine.
A way to know if you are home and are not home, learn your habits some more, and add on to their completing a more accurate and detailed profile of users for ad sales.
The company sells approximately 1 mil units a year (4 month old article I found, take this figure lightly, a grain of salt). Selling 1 mil units at $250 per, it would take over a decade just to reach $3 bil in sales. Nevermind any costs.
So the value is clearly not on the hardware side of things for this niche company.
My post was sarcastic, obviously, but Apple will have money to buy Google in couple of years if they keep on piling that cash away like they do.
Good for Tony and gang. That's a nice return on their investment of time and money. I assume they'll have the money they need to better commercialize their products and develop other products.
Yes, home automations is just thermostats and smoke detectors
Even mere home automation sounds sort of tame compared to their stated vision:
Tony Fadell said:
Payback for AMZN -- based on their current P/E of +/- 1400 -- is only fourteen centuries... Roughly...
As a point of reference, The current P/E is running about 13.5 for AAPL.
Google didn't pay 3.2 billion to make money producing and selling hardware, that's not their business. Their business is information about you for targeted advertising. They paid 3.2 billion for a mountain of data from a company that already has sensors in your home. Think about that for a second.
They paid 3.2 billion for the ability to know when you get up in the middle of the night to take a $#!+ so they can send you ads for NyQuil and Laxatives.
Congratulations Nest, you just took thermostats and smoke detectors from innovative to creepy in one day.