Ann Hermes/The Christian Science Monitor/File
A Nest Learning Thermostat is shown in West Newbury, Mass. The global installed base of smart thermostats will grow from fewer than 1.4 million in 2013 to 31.9 million by 2020, according to a report by Navigant Research.

What is the Internet of Things?

Tech companies are excited about the 'Internet of Things,' but what exactly does that mean? Just imagine your household appliances, Web-enabled and sharing info.

Google has spent billions of dollars over the past few months vacuuming up companies that specialize in smart appliances and machine learning. The search-engine giant has not yet revealed its master plan for these acquisitions, but analysts suspect that Google is investing in the "Internet of Things."

Q: What is the 'Internet of Things'?

You've likely seen glimpses of this concept in movies and TV shows. Science fiction promises houses that will take care of you, instead of the other way around. Product designers have finally started to deliver on this vision of the future, and it seems that Google wants to help lead the way.

The Internet of Things involves the ability of home appliances to "talk" to each other. There are already Philips light bulbs, Audi cars, and Samsung laundry machines that can communicate with smart phones, so why can't they make the next leap and talk directly to each other?

"Without a doubt, there's going to be more and more machine-to-machine communication," says Steve Koenig, director of industry analysis at the Consumer Electronics Association in Arlington, Va. "When our machines can talk to each other and inform each other independent of human intervention, that's when some really cool things can happen."

Q: Where can I see the Internet of Things in action right now?

Take a look at Nest, which Google scooped up in January for $3.2 billion.

The company makes smart thermostats and smoke alarms that connect to the Internet. You can turn up the temperature from your phone before arriving home each day, and receive online alerts about smoke in your kitchen.

But the two devices can also share information with each other. For example, faulty furnaces are a leading cause of carbon monoxide leaks. If the Nest smoke alarm detects elevated levels of carbon monoxide in the air, it automatically tells the Nest thermostat to shut off the furnace, potentially defusing a dangerous situation before things get out of hand.

Q: What hurdles stand in the way of more interactions like this?

As is the case with many young technologies, few companies can agree on the best way to push forward. It's one thing for Nest to make devices that talk to each other – it's a lot more difficult to convince other companies to make devices that play well with Nest.

That's why so many "smart" devices currently interact only with phones. Without any clear standards in place, Apple and Android phones rank among the very few devices with enough reach to be worth programmers' time. Google could help knock down this barrier. It has the clout, breadth, and experience to unite companies and make sure that devices all speak the same language. After all, Google's march into the phone market made its Android operating system the dominant mobile OS, with Android phones currently outselling Apple's iPhone by 4 to 1 worldwide.

Q: What's in it for Google?

Google built its billion-dollar empire by tracking and analyzing how people act online. But it has little insight into what people do away from their screens.

Tethering your digital life to your Google-backed thermostat, television, car, and robot vacuum cleaner could lead to unexpected innovations. (And, of course, Google could sell all this information to advertisers.)

Q: What about privacy?

Google has already attracted a lot of heat for its perceived digital omnipresence. If the company does push into the Internet of Things, this reach will stretch into the physical world, as well. As one journalist quipped on Twitter, "with Nest's built-in sensors now Google knows when you're home, what rooms you're in, and when you're out."

When Google acquired artificial-intelligence firm DeepMind this year for $500 million, it also agreed to establish a technology-ethics board that would in theory rein in the company before it goes too far. Details, such as the structure and purview of this board, are still being hashed out.

For more on how technology intersects daily life, follow Chris on Twitter @venturenaut.

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