In case you were living under three electric blankets last week due to the Polar Vortex, you know CES took place. You know because everyone has published their opinion on what was important from their point of view. Depending on whom you ask, there were five to 12 trends you just have to understand, but only in paragraph consumable bites or in pretty slideshows designed for easy sharing.
And then, just when the dust is settling and people are getting back to what they really know how to do, Google goes and buys Nest for $3.2 billion. And suddenly all of the “experts” who told you the “Internet of Things” and the connected home were going to be big now have numbers to quantify and validate their expertise.
There’s nothing especially bad about this behavior, except when the parlor games begin with trying to dissect why the deal happened and what it means. And the games have begun with Google and Nest.
Upon announcing the acquisition, Twitter was buzzing with the news. People were projecting how this move was about data and joking about ad serving based on your household temperature. One perspective I read suggested it was akin to Google investing $250 million in Uber to get traffic data, completely ignoring the work Google has been doing with autonomous cars and the more likely long-term play into that space, with delivery as the core.
The challenge with having an opinion is what I wrote about last month. Most opinions are inevitably formed by personal experience and bias. Those in the media industry want to explain away the Nest acquisition as an advertising-motivated purchase. They confuse an infrastructure purchase that will inherently come with data as one that will enable advertising to be easily overlaid.
It’s certainly possible that Google, through Nest, could someday offer free smoke detectors and thermostats to individuals who saw an ad-supported model, but I would be lying to suggest that is more viable or planned than anything else written in the 48 hours immediately following a $3 billion acquisition.
As Microsoft, News Corp, and Yahoo have shown over the last decade, billion-dollar acquisitions with obvious media opportunities are not guaranteed predictors of future success. So for Google to spend this amount with a planned move into a non-core focus of the Nest business feels like a heavily biased suggestion.
Make no mistake, through Nest, Google will become more intelligent for consumers and how they organize their home life. Not dissimilar from how Google search and Google+ have given massive insights into how consumers want information organized for discovering relevant content online. But, to project anything more or suggest a deep insight into how this will ultimately turn into an advertising play is fraught with assumptions.
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