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Google, Nest, and Hope?

So Google just bought Nest and much of the Internet basically lost its shit. Including me.

My basic objection is that Nest is a company making great products, selling them for a profit and using that profit to make more products. Google does this as well, but their product is advertising and they're selling it to companies who want to advertise. Nest does neither of these things so it's pretty clear there's a mismatch, and seeing as Google now owns Nest it doesn't appear too likely that the latter will more heavily influence the former as opposed to the other way around.

That would be bad news for Nest and probably good news for Google, and any world in which that comes to pass is a world I'd prefer to not live in. But perhaps that won't happen.

A friend of mine suggested the reason Google bought Nest was not to further Google's mission to organize the world's information, but to help re-imagine Google's design culture. It's true that Tony Fadell is extraordinarily talented and his expertise would benefit Google, but if that's really the goal, do they really need to purchase an entire company?

The most hopeful explanation I've read so far comes from Ben Thompson who writes the excellent blog Stratechery. Ben writes:

In short, if you consider the three business models that are capable of being the foundation of multibillion-dollar businesses – consumer devices, ad-supported consumer services, and business software-as-a-service – Google had just about maximized their potential in the ad-supported consumer services model.

Enter Nest.

In my estimation, this deal is not about getting more data to support Google’s advertising model; rather, this is Google’s first true attempt to diversify its business.

I am still unsure whether he's right, and it's far too early to tell, but for the sake of Nest and the products they make, I hope that he is. I prefer companies like Apple who provide a product in exchange for money, and I will continue to be skeptical of companies who provide a product in exchange for my privacy. If Google is in fact preparing to diversify with its acquisition of Nest, I will be one happy customer.

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