The Google-owned Nest Labs is acquiring Dropcam for $555 million

If houses could talk, they’d likely be chattering excitedly among themselves this evening, discussing the news that Nest has signed an agreement to acquire video monitoring startup Dropcam for $555 million. Nest, known for its smart thermostat and smoke alarm devices, is reportedly making the purchase without any input from Google, its parent company. Dropcam, which makes simple-to-use Wi-Fi video cameras aimed primarily at the home security market, will be incorporated into Nest once the deal closes. The move takes Nest closer to its goal of becoming the main player in the market of home-based connected devices and could ultimately lead to Google involvement in the creation of a fully digitally integrated home.

Google Inc.’s Nest Labs said it agreed to buy video-monitoring and security startup Dropcam Inc. for $555 million as part of a push to become the dominant operating system for connected devices in and around the home. Nest, which makes Internet-connected thermostats and smoke detectors, is paying cash for the startup and will work with Dropcam to develop products and services that connect users to their homes, Matt Rogers, co-founder of Nest, said in an interview. The deal requires regulatory approval. “There’s a lot of alignment between the teams in terms of building products for the home—our product offerings are very complementary,” Mr. Rogers said. Dropcam sells an Internet-connected video-monitoring service that streams live video to mobile apps, sends alerts based on activity that its small cameras sense and lets users communicate with people in their homes while they are away. It markets itself and is often used as a home-security system. The acquisition of Dropcam will likely stir concern about privacy, given that Nest is now owned by Google. Google agreed to buy Nest for $3.2 billion in January and the deal closed in February.

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