Nest acquires Dropcam: Is this what a connected home looks like?

The acquisition of home monitoring start-up Dropcam by Nest, the Google-owned home thermostat company, continues a trend in Google's foray into home appliances. 

By , Staff Writer

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    In this Tuesday, Oct. 1, 2013, file photo, the Nest smoke and carbon monoxide alarm is shown at the company's offices, in Palo Alto, Calif. The Google-owned company will acquire the home monitor start-up Dropcam for $555 million.
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When Google bought thermostat company Nest Labs for $3.5 billion in January, the acquisition called into question whether people would really be okay with letting Google into their personal space – at least, their non-cyber personal space. While there may not yet be definite answers from consumers, Google, for its part, seems to have one: keep buying different parts of an evolving "smart home." 

That mentality was on display in Nest's recent acquisition of the home-monitoring start-up Dropcam for a reported $555 million, announced June 20. Much like the way Nest lets users monitor and control their digital thermostats and smoke alarms remotely, Dropcam lets users see what's going on in their homes and offices through remote cameras connected to the Internet. 

Nest co-founder Matt Rogers has said that this acquisition was not an example of Google absorbing another home monitoring company. Rather, "This is a Nest Labs deal, not a Google deal," Mr. Rogers told The New York Times.

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For the time being, not much will change in the way Dropcam is set up, he says. "Dropcam products will still be sold online and in stores. And Dropcam customers will still continue to use their Dropcam accounts," writes Rogers in a company blog post. He notes, however, that the goal is for the two companies to "work together to reinvent products that will help shape the future of the conscious home and bring our shared vision to more and more people around the world."

As per its agreement with Google, Nest has not changed its privacy policy and does not share any customer information with Google. In a blog post, Rogers stated that Dropcam will now also abide by Nest's privacy policy, meaning it too will not share customer data with outside parties (read: Google will not use this device for targeted ads). 

"Nest has a paid-for business model and ads are not part of our strategy," Rogers writes in the post. "In acquiring Dropcam, we’ll apply that same policy to Dropcam too."

In a separate blog post, Dropcam co-founder echoed this sentiment when he wrote, "Nest cares as much about customers, privacy and product experiences as we do. Our products and technologies are a natural fit and by joining up with Nest we can fully realize our vision." 

Still, the fact remains that both start-ups are now part of the Google orbit. And as Google analyst Danny Sullivan told The Times in January in the wake of Google's acquisition of Nest, "History has shown that privacy policies do change ... They won’t hand over Nest data to Google, and Google mines it for whatever they want, but there could be incentives or reasons why it might make sense to tie it to a Google account."

Similar to Nest, Dropcam gathers sensitive information about the interior of one's home. Although both Nest and Dropcam emphasize that users privacy will not be jeopardized, there are logical concerns at play for privacy advocates. 

For years now, Google has been expanding into arenas far beyond its origins in software as a search engine. Cars, television, glasses – all are examples of the company's recent efforts to create an interconnected universe of hardware and software. Granted, some of its efforts, such as Google TV and Chromecast, the digital media player that streams content via Internet to your television, have not met with huge success. Which could account for its decision to buy companies, such as Nest and Dropcam, with proven track records in their fields. 

The so-called Internet of Things, meaning everyday appliances and objects that are connected to the Internet, is expected to continue to grow as an industry in years to come. By 2025, it is estimated that the Internet of Things "could raise the level of U.S. gross domestic product by 2 percent - 5 percent," according to a report from Progressive Policy Institute.  

The announcement of Nest's acquisition comes just days before the Google I/O Conference in San Francisco this week, where we are likely to gain further insight into Google's latest plans for connected home appliances, among other new developments. 

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