Google has a new, $3 billion Nest egg

Google will acquire Nest Labs, maker of the acclaimed smart thermostat of the same name, for $3.2 billion, the company announced yesterday.

“Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone. We’ve had great momentum, but this is a rocket ship,” Nest CEO Tony Faddell wrote in a blog post. Fadell will remain at the helm and Nest will continue under its own brand.

Wired’s Marcus Wohlsen has a detailed analysis of what the deal means for both companies. Fadell, who designed the original iPod for Apple, is an obvious asset for Google’s hardware ambitions. And Nest gives Google a direct entry to the masses of data that the Internet of Things generates. On the one hand, that could allow Google to do for thermostats and other connected devices what it’s already done for search, email, and productivity software.

On the other, it gives Google a vast new source of data to monetize -- one that reaches into our lives even when we’re away from our computers and smartphones. Wohlsen writes, “[e]ven anonymized user data would give Google incredible new insights into our behavior in the physical world that its vast roster of very smart people could figure out how to leverage in order to advance its business.”

Nest, meanwhile, gets to draw on Google’s vast resources as it expands its product line. And Fadell will be freed up from some of the pressures of running an independent business to focus more on design.