In December, I wrote an article (link) about Google working on a smart thermostat as a play for the connected home.

A couple of days ago, we learned that Google has acquired the 800-lb gorilla in smart thermostat technologies, Nest Labs. 

Nest is the first company to successfully break into the home automation mass market with its smart internet connected thermostat and fire detector. It brought the promise of long term energy savings through intelligent automatic temperature control and the ability to control it via your Android or IOS smartphone.

For now, Nest will continue to operate independently within Google (similar to how Motorola is being run) but you have to imagine that Google will eventually integrate Nest's technologies into the Google ecosystem. 

The Nest Protect fire detectors have built in motion sensors that already talk to the Nest Thermostat to ensure the temperature is kept comfortable when you are at home. Its easy to see how this type of information could be valuable to Google. They can integrate this knowledge into their Google Now product and offer more appropriate cards when you need them.

The main question is how will the market react. If history plays out, there will be small pockets of users that will be outraged at how Google will data-mine their private data but most consumers will gladly accept their new master in exchange for convenience.

I think Google could really shift the market if it can use its cash and clout to significantly drop the price of the Nest products. Imagine the Nest Thermostat at $99 or the Fire detector at $79. This could lead to a huge increase in market demand.