Google has just purchased Nest Labs, the maker of the Nest Learning Thermostat and Protect smoke detector, for $3.2 billion in cash. According to a Google press release, Nest will continue to operate independently under the leadership of co-founder and CEO Tony Fadell; co-founder Matt Rogers will also make the move to Google. While the transaction is subject to the usual regulatory review, Google says it expects the sale to close within the next few months.

It's not yet clear exactly how Google plans to use Nest, but the company obviously sees it as an important part of its future. A combination of Nest's home solutions coupled with Google's language recognition could give Google its strongest path yet into your home.

Nest has published a Q&A with Rogers that reveals some detail on how this new partnership will change things with the company. For starters, Nest confirms that it'll continue to support Apple and iOS products going forward — not a huge surprise, given that Google's been putting out solid versions of its apps and services for iOS for some time now. Warranties will stay the same, and Nest products will still continue to be sold at retail (though there's no word on whether or not they'll be on sale at Apple stores).

Unsurprisingly, the company is remaining coy about how it'll integrate with Google's existing product lineup. "Nest's product line obviously caught the attention of Google and I'm betting that there's a lot of cool stuff we could do together, but nothing to share today," writes Rogers. He did address any potential concerns about Nest's customer data being opened up to Google for advertising or other purposes. "Our privacy policy clearly limits the use of customer information to providing and improving Nest's products and services," writes Rogers. "We've always taken privacy seriously and this will not change."

Interview with Nest co-founder Matt Rogers at CES 2014.

Google CEO Larry Page said the following in a statement:

Nest’s founders, Tony Fadell and Matt Rogers, have built a tremendous team that we are excited to welcome into the Google family. They’re already delivering amazing products you can buy right now--thermostats that save energy and smoke/CO alarms that can help keep your family safe. We are excited to bring great experiences to more homes in more countries and fulfill their dreams!
Nest CEO Tony Fadell's statement on the purchase:

We’re thrilled to join Google. With their support, Nest will be even better placed to build simple, thoughtful devices that make life easier at home, and that have a positive impact on the world."

Earlier this week we witnessed a pretty awesome refutation of super strong versions of the Efficient Capital Markets Hypothesis.

Google announced its multi-billion dollar acquisition of Nest Labs, which makes stuff like internet-connected smoke alarms and thermostats.

As that happened, a company trading under the symbol NEST shot up 1,900 percent. The problem is that company, Nestor, has nothing to do with the company Google bought. Nestor is an empty shell that's been in receivership since 2009.

The blogger who styles himself KidDynamite brought this to the attention of those of us who follow him. And we all had another occasion to chuckle wisely about the foolishness of the notion that all securities always priced correctly. William Alden, of DealBook, somehow produced a rather straight-faced report on all this. He even explained what the company attached to the ticker NEST once did.

Nest Stops Selling 'Protect' Smoke Detectors Over Safety Concerns
Thursday April 3, 2014 2:43 pm PDT by Juli Clover
Nest CEO Tony Fadell today published an open letter on the Nest.com blog announcing that effective immediately, the company is going to temporarily cease selling its multi-sensor iPhone-connected Nest Protect: Smoke + Carbon Monoxide alarm, which was first introduced in October.

According to Fadell, a recent laboratory test revealed that Nest Wave, a feature that enables the device's alarm to be turned off with a gesture, could potentially be used to turn off an alarm unintentionally, thus delaying the activation of the alarm in a real fire.

The company is immediately disabling the Nest Wave feature until the issue is resolved and while a fix is being worked on, sales of new Nest Protect alarms have been halted. Nest urges customers with existing alarms to connect them to a Nest Account (if they are not already connected) so the Nest Wave feature can be automatically disabled. Customers without access to WiFi can receive a complete refund for their devices.

Nest states that no customers have been affected by the potential issues with Nest Wave and that the steps it has taken to halt sales are a precautionary measure. The company estimates that fixing the issue will take two to three months.

In a December letter to the Securities and Exchange Commission, which was disclosed Tuesday, the search giant said that it could be serving ads and other content on “refrigerators, car dashboards, thermostats, glasses, and watches, to name just a few possibilities.”

Correct Answer
by nest_brian on May 21, 2014 2:02 PM
Hi stevetim



I want to clear this up. Google is in contact with the SEC to clarify the language in this 2013 filing, which does not reflect Google's product roadmpa. Nest does NOT have an ads-based model and has never had any such plans.