The Real Reason Why Google Bought Nest for $3.2 Billion
Google just bought Nest, a startup that sells Internet-connected thermostats and smoke detectors, for $3.2 billion.
It's easy to imagine there is some secret reasoning behind this acquisition. Something to do with Google knowing which room you're in so it can show you better ads. (That will probably not happen, by the way.)
But the truth is, there is a very simple reason why this deal happened.
What Nest does is fit into CEO Larry Page's vision for what Google does.
That is to say: Nest uses complex technology to solve a problem that lots of people have on an everyday basis.
That's what Page wants to do with Google.
He wants to use complex technologies to come up with simple solutions for complex problems that huge masses of people have -- like controlling their climate of their homes in an energy-efficient way.
Page explained this vision back in the fall of 2011, just months after he became CEO again.
At a conference for Google clients and stakeholders, Page said the company's mission is "to create beautiful, intuitive services and technologies that are so incredibly useful for people that people use them twice a day, like you might use a toothbrush. There aren't many things people use twice a day.
He said: "It's actually pretty hard to come up with something like that."
Nest did -- in thermostats, smoke detectors, and whatever other Internet-connected home appliances it was working on.
In Larry Page's vision, Google is not a search engine company. It is not an advertising company. It is a company trying to leverage its massive horde of cash and deep technological expertise to create products that billions of people will use some day. Smartphones. Self-driving cars. Robots that keep your house running.