Why Nest Labs Could Boost Google: Growth
With $50 billion in revenues, it is getting tougher for Google to keep up its growth ramp. This means the company has little choice but to expand into new categories and grow via mergers and acquisitions. No doubt, the home automation market — which the Nest thermostat is a leader in — has huge potential.
By snatching up Nest Labs, Google will get a management team that understands this market and how to attack it. For example, Nest has extensive relationships with utility companies and also has a team of over 25,000 certified installers.
Plus, Nest Labs will operate as an independent company. For the most part, its brand stands for slick design and cutting-edge technology, which will be key for getting uptake with consumers. Let’s face it, the home automation market is likely to get more and more crowded as tech giants like Microsoft (MSFT), Samsung (SSNLF)and Apple (AAPL) move in.
Oh, and while tech acquisitions can be extremely tough to pull off, Google has been able to find ways to make deals work. Just look at what the company has done with YouTube and Android.