Google buys smart-thermostat maker Nest

Acquisition should raise privacy concerns, expert says

Published: January 14 2014 | 11:22 am - Updated: 29 March 2014 | 2:04 am in

Thermostats generally aren't that exciting. But the one made by Nest is so much so that Google is willing to pay $3.2 billion to buy the company.

Nest produces thermostats that "learn" users' habits and adjust to their daily routines, as well as smoke alarms that communicate with its thermostat.

Google announced the acquisition Monday and said it would continue to be run independently by Tony Fadell, who founded the firm in 2011. "With [Google's] support, Nest will be even better placed to build simple, thoughtful devices that make life easier at home, and that have a positive impact on the world," Fadell said in a statement.

Last year, Google Ventures, the search giant's investment arm, plowed $80 million into the start-up. Two weeks ago, Nest raised an additional $150 million, leading to valuations of more than $2 billion for the company.

That was before Google snapped up the company Monday in a deal that pushes the Internet giant further into the hardware market and into users' homes. Google has already started selling its own smartphone, the Moto X, and is expected to begin offering Google Glass to a wider market this year. "Google wasn't kidding when it was saying it wanted to organize all the world's information, I guess," joked Jay Stanley, a senior policy analyst at the American Civil Liberties Union.

But the acquisition should raise privacy concerns, said David Jacobs, a lawyer at the Electronic Privacy Information Center. Google already collects a significant amount of data on its users, and by monitoring customers' thermostats it could determine when they are at home and when they are out, Jacobs said.

Asked whether Nest would share customers' information with Google, a Google spokesman, who declined to be named, pointed to Nest's privacy policy, which says the company will use data only to improve its own products. A Nest spokesman declined further comment from the company.

But Google could easily revise Nest's privacy policy, Jacobs said. "Google has made several changes to its privacy policies and its business practices," he said. "Whenever it does, the message to consumers is, 'You accept the changes, or you use something else.' There's nothing really stopping the companies from changing their mind down the road and deciding to use it for advertising or something else."

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