Back in January, it was announced that Google would be acquiring Nest, the smart thermostat and smoke detector company whose popularity has been growing gradually since its humble beginnings as a Kickstarter project, for a whopping $3.2 billion. With high profile acquisitions, especially one that concerns the data privacy of users, the deal had to go through FTC approval.
According to a new report from Computer World, the deal has been approved early by the FTC and Antitrust Division of the Department of Justice, with Google hoping the deal is completely closed within a couple of months.
Now what happens? It has been speculated that after Motorola’s departure from Google that Nest will take up the hardware manufacturing needs of Google, reportedly for consumer electronics and other special projects. No details are definitive, but you can bet that Google has bigger plans for their $3.2 billion investment than to just keep making smoke detectors and thermostats.
Whatever Google does have in mind, we are sure it’s going to be quite exciting.
Dear Google:
If you are reading this. DO NOT sell this to a foreign company. Keep this, and the jobs it provides here in THE UNITED STATES OF AMERICA.
Great, another company Google can sell to the communist Chinese….
$3.2 vs $2.91. So Nest is worth more than Motorola in Google’s mind? Wtf??!!!
Not really. Google sold Motorola the name and the factories etc for 2.91B. They sold another part for 3B earlier if I remember and kept the patents which they valued at 5.5B.
Think it will be sold to the Chinese in 18 months
I’m building my house and I was already planning on using Nest thermostat and Protect. I got even more exiting to buy those products now Google owns Nest! I also was planning on getting webcam, stereo system and other gadgets for my house with other vendors but now I am waiting to see what Nest brings in the upcoming year.
Nexus Nest Smartwatch anyone?
I can’t wait to see what comes of this. It’s probably going to be mind blowing.
Two words : smart home.
I can beat that. One word – “Jarvis”
Everyone will have Bill Gates home from the 90’s, it recognizes people moving room to room and adjust the temperatures to those rooms and lighting. Bill Gates spent millions just in his automation back in the 90’s which people will be able to do for a couple thousand in a couple years.
Simply amazing that politicians have any say over this at all.
Who’s supposed to have the say?
Why does anyone other than the two parties to the contract need to have a say?
Without them any company could keep buying others and become a monopoly. They are there to prevent that and a lot of other things.
Yes, any company can just keep buying other companies. How does that result in a monopoly?
And has that ever happened?
OK. So lets say Google buys Sprint. Then they buy T mobile. Then they buy ATT then they buy Verizon….
God himeself couldn’t make that get past the FTC
Then a new wireless company enters the market. And then another. And then another.
Its not easy creating a new wireless company. Many of the ones you see today were the off spring of several phone companies (GTE, Bell, PCS, etc
It’s not easy precisely because the government designs regulations to make it difficult…regulations written by the established business interests.
Take an economics class. Then report back with your findings.
Ah, but you’re the one regurgitating economic fallacies!
Oh boy, someone took Intro to Microeconomics…
I suppose the capital to build these new wireless companies is just supposed to come out of thin air? Firm entry/exit in a market is nowhere near as simple or quick in real life as it is in a textbook model, *especially* when you’re talking about a market with startup/fixed costs as high as the wireless communications industry. If, running with Chris’s hypothetical scenario, Sprint, T-Mobile, AT&T, and Verizon all became one company, it would be tremendously easy for that company to shut any other entry out of the market–just control/integrate sources of necessary inputs whenever possible, and keep prices low enough (but still artificially inflated) so that an upstart competitor would never be able to recoup the tremendous investment needed to build out a network infrastructure before they went bankrupt. Before you accuse me of “regurgitating fallacies,” just look at what happens with cable providers in rural areas. A single provider moves in, seizes as much control of the infrastructure as they can, and establishes a chokehold on the cable market. Any competitor wanting to move in to the area would never gain enough customers (given the frictional cost of switching providers and the ability of the monopolist to manipulate prices) to recoup the investment needed to build out, so a provider like Time Warner Cable owns the area. The only firms that can really compete are satellite, because they have much lower location-based fixed costs. To see this happening on a broader scale, just look at Wal-Mart–they enter an area, discount their goods aggressively to undercut all other businesses in the area until they are the only ones left and then hike their prices afterward. It’s all about economies of scale and the power of a monopolist as a price-maker.
None of that, you might notice, has anything to do with “the government.”
Have you ever actually studied the state of the telecom market prior to AT&T’s monopoly?
No? Probably because they don’t teach that in an intro to econ course.
Your conjecture is unsupported by reality. Natural monopolies do not exist, and are a post-hoc rationalization of monopolies that were created by government legislation and regulation.
http://mises.org/journals/rae/pdf/rae9_2_3.pdf
Yes, and that new wireless company tries to compete with a monster company that has all the towers, all the infrastructure, and all the money it needs to keep the new wireless company from being able to even get a foothold. Seriously, you need to study some basic economics before you try to debate in that subject.
Take an economics history course. What you describe has never actually happened. When we had a free market in telecommunications with very little regulation, there was an immense amount of intense competition. It wasn’t until the US government started passing protectionist legislation and then outright nationalized the industry that AT&T gained a monopoly.
i guess you don’t remember life under Ma Bell.
I guess you don’t remember how it was a monopoly created entirely by government.
Who’s going to protect consumers? You can’t just have massive companies merging without oversight. Perfect example is how the At&t Tmobile merger got shotdown because then At&t would have a monopoly on GSM networks in the US. You have companies merging left and right without oversight and all of a sudden you have no competition and the consumers suffer because no competition means high prices.
You really believe the government protects consumers? If AT&T raised prices on GSM, people would find and create alternatives, forcing AT&T to get back to reality.
The only entity in this country without competition is government.
Right…. People have done this for years with out goverment and look where it brought us.
AT&T and T-mobile have a duopoly on GSM networks in the US precisely because the government designs regulations to prevent new competition (legislation written by these two companies).
You discount the effect of new competition entering a market with high prices?
High prices mean lesser sales. lesser sales mean closure of business and that means unemployment rate will go sky high
High prices means new competition to enter the market and offer the product at a lower price.
I’m sorry but cowboydroid is speaking the truth here guys. Just look at what Tmobile has done to the wireless market by lowering their prices. Let the free market run itself and the consumers will pick the winners and losers. All this government interference does nothing but waste tax dollars and hurt the consumer.
New competition enters the market, the monopoly lowers it’s prices to ‘Offer more competative prices’ which since the monopoly owns all the networks, has all the customers, and the extra capital resources, can now keep the new competition from making enough profit to build it’s own networks, or lower prices to entice incoming customers. Thus the new competition fails before it even had a chance to start.
If the monopoly lowers its prices, that’s precisely the desired outcome! That is the WHOLE point of competition!
If the monopoly succeeds in keeping new competition from being profitable by lowering its own prices, it cannot then raise them again without risking new competition from re-entering the market. Thus, prices stay low.
No. This is the Mobile Market. High Prices will result from having the most customers, which would result in controlling the pricing in the market, which will result in drawing OEMS to work closer with them which would include MORE exclusives…why? Because the OIEMS will go where the customers are.
Yeah i say we let high school kids do it.
Well look who we have in Washington. Half have been there since the Nixon days. i’m sure theres one in there who knew Kennedy.
Cowboydroid is absolutely correct. As long as Google and Nest agree, it’s none of the state’s business.
i could see Nest being a nice addon for those that can actually get Google Fiber…or anyone really…but Google could discount equipment when you get Nest with their Fiber service.
Cool idea, if Google can get in gear and spread Fiber.
I wonder how much 3.2 billion would have bought with fiber optics installations and new customers?
And so begins the takeover of home appliances by Google. I guess they saw how Samsung was able to take over homes with all their house products this way and Google wants a piece of the pie.