Nest Labs, a company in which Google recently invested $3.2bn, is acquiring video-monitoring and security startup, Dropcam, for $555m as it eyes expansion in video surveillance.
Dropcam offers an Internet-connected video-monitoring service that streams live video to mobile apps, sends alerts based on activity sensed by small cameras, and lets users communicate with people in their homes while they are away.
Industry insiders believe that the acquisition will help Nest Labs, which is involved in the manufacture of Wi-Fi capable, self-learning thermostats and smoke detection devices, expand its in-home data points to video surveillance.
Subject to regulatory approval, the all-cash deal will involve development of products and services that connect users to their homes, said Matt Rogers, co-founder of Nest.
"There's a lot of alignment between the teams in terms of building products for the home - our product offerings are very complementary," added Rogers.
Nest is already looking at integrating home automation and social networking based on the Nest thermostat's ability to sense when a user is at home or away based on light detection, security system inactivation or device usage detectors. Having already secured a patent for the same, Nest said that a user's status can be reported to their trusted contacts on the social network.
Leveraging synergies aside, concerns related to privacy have already started doing the rounds regarding the deal, given that it is under the umbrella of Google now. The tech giant acquired Nest for $3.2bn in January.
Dropcam also has a feature that lets users invite friends to view their video streams or make it public, but ad-selling is currently not on the radars of either Nest or Dropcam, said Rogers.
Industry analysts say that the acquisition is more in line with Google's historical data collection strategies of crowd sourced data surveillance. A recent example is the FBI investigation of the 2013 Boston bombings in which investigators had at their disposal enormous amounts of data and faced challenges analysing it. Although, in this case, privacy was not a concern as most people and businesses volunteered their own data in order to aid investigators.
Under the privacy scanner, Nest Labs and Dropcam partnership has to tread on cautious ground.