Nest is Google's third largest purchase to date, trailing only Motorola Mobility and ad firm DoubleClick. The takeover sum seems very hefty for such a small company when you consider that much larger tech firms are valued at the same price or even lower. Beaten-down chip maker AMD for instance currently has a market cap of $2.99 billion.
Google said yesterday that it’s buying Nest Labs Inc., the digital thermostat maker led by Tony Fadell, a former Apple senior vice president, for $3.2 billion in cash. Fadell, 44, worked closely with Apple co-founder Steve Jobs in helping create the iPod and iPhone.Source: Bloomberg
Fadell said in a blog post yesterday that conversations with Google started in 2011, when he showed co-founder Sergey Brin an early model of the prototype. That year, Google’s venture arm invested in Nest, following earlier financing from Kleiner Perkins Caufield & Byers and Shasta Ventures.