Google Moves into Smart Homes with $3.2 Billion Acquisition

The battle over home automation has heated up as Google buys into a thermostat maker. The technology giant just grabbed Nest Labs for $3.2 billion in an all-cash deal.

Nest's mission is to reinvent unloved but important devices in the home such as thermostats and smoke alarms. Since launching in 2011, the Nest Learning Thermostat has been a consistent best seller. The company's recently launched Protect smoke and CO alarm has earned good reviews.

"Nest's founders, Tony Fadell and Matt Rogers, have built a tremendous team that we are excited to welcome into the Google family," said Google CEO Larry Page. "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!"

Creating the Conscious Home

Tony Fadell, CEO of Nest, called the acquisition a "momentous day." When he and Matt Rogers founded the Palo Alto, Calif.-based company, he said, the two were determined to change their homes and the world around them.

"Starting a business focused on the lowly thermostat seemed like a crazy idea at the time, but it made all the sense in the world to us," he wrote in a blog post. "That little device that went unnoticed and unchanged year after year on the walls of our homes was a lost opportunity to save energy and money. We knew we could do better."

The duo got to work creating what Fadell calls a "conscious home" -- a home that is more thoughtful, intuitive and nice to look at. Fadell and Rogers were confident they could do it with the right product, the right team, and focus. The rest has become part of Google history.

"Google will help us fully realize our...

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