) owned Nest Labs, a home automation company, recently entered into
a definitive agreement to acquire Dropcam, a video-monitoring and
Internet home security camera maker for $555 million in cash, as
The Wall Street Journal
Following the deal, Nest will integrate Dropcam's business into
its existing portfolio of smart-home products, which at present
includes Internet-connected thermostats and smoke detectors.
Moreover, Dropcam's staff will join Nest's office. Nest will also
gain access to the customer database for Dropcam's products.
This move will extend Nest's footprint into home security and
video monitoring, thereby helping it to accelerate its push into
web connected homes. This adds to Google's existing efforts in the
consumer appliances industry and that too at a time when consumer
appliances and Internet services are getting interconnected. It is
also expected to provide a boost to Google's profitability going
The home monitoring market is a very attractive segment and
technology companies are swarming to it.
) recently launched its own HomeKit development tool to allow users
to wirelessly manage devices at home with the help of a single app.
Moreover, iPhone users can also manage lighting, door locks, garage
door openers, heating and air conditioning.
Dropcam, founded in 2009, sells web connected cameras that
provide home monitoring services as well as an optional cloud
recording service. It allows users to track their home activity
through motion sensors and live video streaming. The service also
sends notifications to users' smart phones while they are away from
However, the acquisition will likely raise privacy concerns,
considering that Nest is now owned by Google. Nest has assured that
Dropcam's data will be kept separate from Google.
Google acquired Nest Labs for $3.2 billion in cash earlier this
year, in a bid to get a foothold in the home market. Nest Labs
designs and manufactures sensor-driven, Wi-Fi-enabled,
self-learning, programmable thermostats and smoke detectors. It was
co-founded by former Appleengineers Tony Fadell and Matt Rogers in
2010. Nest Labs was the second largest deal in Google's history
after the 2012 acquisition of Motorola.
Google has been exploring various ways to diversify its revenue
base and counter competition from the likes of
). The company has been extending its foothold in new areas ranging
from high-speed Internet access to advanced research on
self-driving cars and robotics. Acquisitions have been a key tool
to accomplish its goal of increasing the demand for its web
Some of its recent acquisitions include MDialog Corp., a
video-advertising company, to bolster its advertising business and
wireless-communications startup Alpental Technologies Inc. to
enhance its wireless business.
Google currently holds a Zacks Rank #2 (Buy).
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