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Amazon’s Eero Acquisition Is All About Data, but Not the Data You Think


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Amazon 's acquisition of mesh router maker Eero caused an uproar among Eero's customers on Monday, with some suspecting that Amazon would soon be able to spy on everything they do online. That's not true at all - but Amazon can still learn a lot from Eero's user base, even without violating their privacy. In fact, some of the incidental data may be a key reason Amazon acquired Eero.

First things first: Amazon did not buy Eero to monitor what you are buying online. The router maker's privacy policy doesn't allow it to monitor its users' internet browsing, and Eero and Amazon were quick to assure their customers that this wouldn't change with the acquisition.

Hi Steve! eero and Amazon take customer privacy very seriously and we will continue to protect it. eero does not track customers' internet activity and this policy will not change with the acquisition.

- eero support ���� (@eerosupport) February 11, 2019

There are good reasons why Amazon wouldn't want to do this, even if you don't trust promises from big tech companies these days. For one thing, crossing this line would be a serious breach of trust, with the potential to kill a nascent business. This is why Amazon in the past fought a search warrant for voice recordings of its Echo smart speaker (the company lost this fight).

Amazon also doesn't need to spy on your web traffic to know what you are buying online. The company already operates the biggest online store, giving it countless data points on products you purchase, the products you search for, and the products you leave the site for because Amazon doesn't sell them.

But even without spying on your web traffic, Eero knows a lot about you, and about its user base in aggregate. The company has not been shy about this data in the past, showcasing it in two separate reports in 2017. Data collected by Eero includes usage patterns, revealing when people go online, as well as geographic differences in internet usage.

Network usage data from Eero's second consumer data report.

What's more, Eero knows exactly what devices you have in your home, and how popular devices are across its user base, and all over the country.

Device popularity data from Eero's first consumer data report.

The company has a lot more granular data on certain device types, including some of Amazon's key competitors. Take Sonos for example: Eero not only knows how many of its customers own Sonos devices, but even where in the country the smart speaker has its most loyal fans.

Sonos data from Eero's first consumer data report.

This type of granular data extends to all kinds of streaming devices, including those directly competing with Amazon's Fire TV, according to data Eero shared with Variety in 2017.

Eero data exclusively shared with Variety in April of 2017.

And Eero knows what devices are frequently paired together.

Eero data exclusively shared with Variety in April of 2017.

There are a few caveats worth noting about this data: Eero's user base is obviously self-selective. Not everyone goes out and buys a mesh router system. In fact, most consumers simply stick with the router supplied to them by their internet provider.

Eero's price tag, its Apple-like aesthetic, and even its retail partners also skew the data, leading to results that show Sonos speakers and Apple TVs being a lot more popular than those devices actually are with the general population. However, as Amazon takes ownership of the company, and presumably looks to sell a lot of its mesh routers, those lines could eventually blur.

Ironically, Eero has also had some difficulties correctly identifying Amazon devices, which was why Variety ended up not publishing the data back in 2017. The e-commerce giant's consumer electronics hardware has traditionally used fairly generic Wi-Fi names, making it harder to tell a tablet apart from a streaming stick. Presumably, Amazon would be able to remedy this as well, if it wanted.

Eero's privacy policy also allows the company to collect a variety of performance data on its routers as well as devices connected to it. In aggregate, this could presumably give Amazon a window into evaluating how well its own and its competitors' devices perform under real-world conditions - something that could be far more valuable than any lab test.

That's especially true as Amazon continues to build out it hardware strategy, combining internet-connected appliances, home security cameras, smart TVs and voice-activated speakers. Data insights are key for both engineering and marketing those types of devices - and Eero may just be what Amazon needed to get its hands on that kind of data.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Investing , Technology



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