Why Nest really is Google’s new smart home division

The Verge: Where do you and [co-founder] Matt [Rogers] report? What’s your relationship with Google?
Tony Fadell: I report directly to Larry [Page] and Matt reports directly to me.

That information is huge—of Google’s 40,000+ employees, only a special handful directly report to Larry Page. The ones we know of are Alan Eustance, head of Knowledge (Search and Google Now); Sridhar Ramaswamy and Susan Wojcicki, who jointly head Advertising and Commerce; Salar Kamangar, head of YouTube and Video; Sundar Pichai, head of Android, Chrome & Apps; and Vic Gundotra, head of Social (Google+). Numerous reports peg these people as members of the fabled “L Team”—Larry Page’s inner circle. Each person is a Senior Vice President in charge of a major product division at Google, and all are plainly laid out on Google’s Management Team page as “senior management.”

Extremely well thought-out piece by Ron Amadeo on Ars Technica, about why the implications of Google’s Nest acquisition might be a bit larger than most are assuming.

That one unsuspecting answer from Nilay Patel’s interview of Tony Fadell really managed to convey more than pretty much all of the other articles speculating about Google’s ambition with Nest put together did.

It comes to my mind here that Marrisa Mayer’s exclusion from the aforementioned L-Team1 was one of the biggest and most obvious signals of Marissa Mayer’s career at Google losing momentum.

Google has lived through the launch and tremendous success of the iPhone and iPad, which silo-ed Google and thus points that it could collect data from to just a handful of apps. Just last year, Apple made conditions even worse by evicting most of Google off of stock iOS, even sticking with their objectively inferior Maps data so as to not have to rely on Google’s.

And catching up to these devices by making its own software and partnering with ODMs surely has been reaped rewards over time, but it wasn’t an easy or short journey. The Galaxy SII (2011) was the first proper Android-based iPhone alternative in my opinion. The Nexus 7 (2012/13) iterations make a good argument for Android tablets too, but are the only ones even remotely close to any iPad. The full-sized iPad Air has virtually no competition in its category, as does the iPod touch, a vital device in terms of how much it lowers the barrier to entry.

That Google might have bought Nest so as to have a hardware wing (and brand, more importantly) ready for battle should Apple and/or Microsoft decide to move ahead with their own visions of the connected home doesn’t seem that surprising then.

It would be interesting, however, to see if Google uses Nest’s products and brands as a way to directly compete with Apple in unfamiliar territory, or if they’ll subsidize the hardware and use it as just another way to add more and more data to the Google vaults. I, for one, am in the camp that’s hoping that it’s not the latter.

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  1. I wouldn’t recommend opening that link on a mobile device, at least without a mobilizer. It’s been known to crash browsers.