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Nest Buys Dropcam as Google Continues March Into Smart Homes

Thumbnail image for 2014-6-23 Dropcam.jpgGoogle is making another move to make its mark in the developing Internet of Things. Late Friday, Nest — the home automation company which Google acquired in January — announced it was buying home-monitoring camera developer Dropcam for $555 million cash.

No sooner had news of the deal emerged than questions about information, privacy and Google started to appear. However, representatives from Dropcam said this is a straightforward deal and that Google will not be getting its hands on anyone’s data.

Google and Privacy

The discussion that is now taking place is similar to the discussion that took place six months ago when Google bought Nest. Then, Rebecca Herold, an information privacy expert, told us that for that acquisition to work, Google and Nest Labs must preserve customer privacy and avoid urges to collect personal data for marketing and advertising purposes.

There is no evidence as yet to suggest that Google has done anything to compromise the privacy of Nest users’ data. That said, as we have seen before with Gmail, Google doesn’t necessarily think that Google users should even expect privacy.

This is clearly a concern for Dropcam. In a blog post on the deal, Matt Rogers, Nest’s founder and head of engineering, said that under no circumstances would Google be getting the private information of any of Dropcam’s customers.

Like Nest customer data, Dropcam will come under Nest’s privacy policy, which explains that data won’t be shared with anyone (including Google) without a customer’s permission. Nest has a paid-for business model and ads are not part of our strategy. In acquiring Dropcam, we’ll apply that same policy to Dropcam too."

Nest’s privacy policy promises that information will not be shared with third-party companies without the express permission of the individual concerned:

Over time, Nest may provide the opportunity for you to interface Nest Products to one or more third party products and services, which will involve the exchange of information from your Nest Product. Your explicit consent and authorization will be required for this interface, and will be revocable by you at any time."

Until the deal is actually closed there is no way of knowing how this will apply to Dropcam and Google, but it is one that will undoubtedly be well monitored.

Why Dropcam? Why Now?

So if not for the information, why the acquisition? While Google is expanding and reaching into many different markets, the acquisition of Dropcam by Nest is part of an ongoing attempt to make its mark on the Internet of Things.

Nest makes smart thermostat and smoke alarms and was the Internet firm's second-largest ever acquisition, with a price tag of $3.2 billion. Dropcam makes video camera systems for home monitoring.

Though the price for Dropcam is only one sixth of the price Google paid for Nest, the target market is still the same, notably the Internet of Things (IoT) and specifically the "smart home" market.

While the smart home market is still really only at the very earliest stages of growth, it is a fast growing area consisting of vendors that are selling technologies into homes to make them more efficient and easier to run.

Google is not the only company that is looking to make a mark here. Others like Apple, Samsung and LG are already producing smart home apps.

It is still far too early to say who will dominate this part of the IoT, or what kinds of products will be developed for the smart home, but the potential is huge, as IBM has demonstrated already with smart cities. There will likely be a lot more movement in this space very soon. 

 
 
 
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