Google to 'Supercharge' Nest by Absorbing It

Nest Labs will no longer develop smart home products as a mere
subsidiary of Alphabet. It's joining Google, which intends to integrate its technology into Nest products.

"The goal is to supercharge Nest's mission," Google said in a wednesday blog post.

Both Alphabet subsidiaries have already been integrating their hardware and software products together. But moving forward, Google's AI and voice assistant technology will be "at the core" of new products developed under the Nest line.

The decision also gives some clarity to Nest, which is best known for its smart thermostats. In 2014, Google shelled out $3.2 billion to buy the company in a move that should've also supercharged the smart appliance maker. But the deal has struggled to pay off.

One problem is that Nest and Google overlap in the smart home space as subsidiaries under Alphabet. For instance, the two were reportedlydeveloping a software product with similar functions and the same name, Weave.

In 2016, Nest also faced negative press for failing to introduce new products. In that same year, the company's original CEO Tony Fadell left.

Since then, Nest has developed some new tech, including a smart doorbell that's slated to ship in March. On Wednesday, Google revealed that Nest sold more devices in 2017 than the previous two years combined. However, in an interview with CNET, Nest's current CEO Marwan Fawaz said it had shipped 11 million products to date — not exactly an incredible amount, given that its smart thermostat first went on sale in 2011.

The two companies are coming together as they face stiff competition from Amazon and Apple in the smart home market. Google has been responding by selling its smart speakers under the Google home line. The company sold "tens of millions" of them last year.