By Alexei Oreskovic
SAN FRANCISCO Jan 13 Google Inc on
Monday announced plans to acquire Nest Labs Inc, a maker of
smart thermostats and smoke alarms, for $3.2 billion, signaling
the Internet company's intention to expand into a broader array
of devices and bringing valuable hardware design expertise
Nest, which was co-founded by one of the creators of Apple
Inc's iconic iPod music player, will continue to
operate as its own distinct brand after the all-cash deal
closes, Google said.
The deal is the second-largest in Google's history, after
the $12.5 billion acquisition of mobile phone maker Motorola.
"Nest Labs appears to be focused on thermostats and smoke
alarms, but it's not far-fetched to see Google expanding this
technology into other devices over time," said Shyam Patil, an
analyst at Wedbush.
"Home automation is one of the bigger opportunities when you
talk about the Internet of everything and connecting everything.
This acquisition furthers their strategy around that," he said.
Shares of Google were up 0.5 percent at $1,128.49 in
extended trading on Monday.
Nest will continue to operate under the leadership of Chief
Executive Officer Tony Fadell - a former Apple executive who is
referred to as the "godfather" of the iPod - with its own
distinct brand identity, Google said
Nest, which counts Kleiner Perkins, Lightspeed Venture
Partners, Google Ventures and Shasta Ventures among its
investors, employs a large number of designers and engineers
from Silicon Valley firms like Apple and Google.
It gained a large following with its first thermostat - a
round, brushed-metal device with a convex glass screen that
displays temperature and changes hue to match the color of the
wall it attaches to. It also tracks usage and employs that data
to automatically set heating and cooling temperatures.
The Palo Alto, California-based, company employed about 280
people as of October.
Google CEO Larry Page praised Nest's current products and
its founders' talents in a statement and said that Google was
"excited to bring great experiences to more homes in more
countries and fulfill their dreams."
Google said the deal is expected to close in the next few
months pending regulatory approval.