Google announced yesterday that they acquired Nest for $3.2 billion (yes billion) in cash. You read that right, they spent about 5% of their cash on hand to acquire a startup company that builds smart thermostats and fire detectors.
Why? Is it so Google can know the temperature in your house? Is it so Google can pitch you products based on your sleep patterns? Is it to completely freak out Google consumers?
I think not.
If I had to guess, it is about acquiring a company that knows how to make Apple-like hardware. Google does awesome software but their hardware isn't at the level of Apple. The iPhone vs Nexus device, no one would honestly say that holding a Nexus smartphone feels as good as holding an iPhone. If you do, you are lying. The software or features might be superior but the hardware feel is not.
Anyway, is that worth $3.2 billion? I guess to Google it is.