​Nest is costing Google a lot of money to take the smart home fight to Amazon

But it shows how Google is willing to invest in the connected home

Nest is losing big money for Google

One consequence of Google repatriating Nest is that we now get a picture of how much money the company is making – and the answer is that it’s costing Google a ton of money.

Four years after Google paid $3 billion for the smart thermostat maker, quarterly results show that Nest is turning $726 million in annual revenue but has contributed to $621 million loss for Google. In other words, it’s costing Google over half a billion dollars to turn Nest into a major smart home player.

Essential reading: The complete guide to Nest

Under Google’s stewardship Nest has gone from a smart thermostat maker to operating as a fully-fledged smart home ecosystem in its own right. It now lines up with multiple indoor and outdoor smart home cameras, a smart smoke alarm, the new Nest Hello doorbell and a growing range of smart thermostats, too.

Google is embroiled in a smart home battle with Amazon, which itself is dropping big cash. Bezos' boys have paid out $1 billion for Ring, a smart doorbell company, and Amazon has also snapped up smart camera company Blink. So while a lot of this Google expenditure is about tooling up Nest to be a big player, Amazon is buying its way towards becoming a big smart home stable too.

Of course, none of these costs take into account work done on the Google Home smart speaker range or Google Assistant, which also make up a huge part of its smart home push.

It’s an insight into how costly the smart home game is becoming – sadly a sure fire sign that only the big beasts of the tech world will be able to compete.

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