Google is considering combining Nest Labs with its hardware team, a move that could aid it in its fight against Amazon and its rival’s lineup of smart home products, The Wall Street Journal reported.
Google acquired Nest in 2014 for $3.2 billion. Nest is currently operating independently as part of the Other Bets unit of Alphabet, Google’s parent company. Other Bets, a unit that also includes Google Fiber, posted Q3 2017 revenues of $302 million, up from $197 million a year earlier, and an operating loss of $812 million, narrowed from $861 million.
Google declined to comment on the WSJ story.
Nest is now led by Marwan Fawaz, a former cable industry vet who also headed up Motorola Home before it was sold to Arris in 2013.
Nest, a maker of thermostats, cameras, doorbells and other smart home products, recently inked a deal with Altice USA. Google also makes its own line of smart home products, including an expanding group of Google Home products and models hat help it to match up against the Echo, Echo Dot and other Alexa-powered smart home gear from Amazon.
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The WSJ said combining Nest and its 1,000 employees “would market a retrenchment of Alphabet’s strategy to separate its core Google internet business from a number of other units, such as its research lab and life-sciences firm.”
Combining Nest with Google’s hardware business would bring more unification with respect to the company’s smart home products and how they are marketed and sold.
WSJ also pointed out that many of Nest’s products already work with Google’s and Amazon’s A.I. platforms, and that Alphabet had also combined the supply-chain teams of Google and Nest last year.
