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