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Nest Acquisition: Another Brick in Google’s Great Wall of Data

Just when will Google’s voracious appetite for collecting data on every aspect of our lives be too much? For Xconomy’s chief correspondent Wade Roush, Google’s $3.2 billion acquisition of Nest Labs, known for its slick, intuitive smart thermostat, represents his “personal tipping point.” For more on the deal, read here.

“Google is getting too big,” he wrote. “When one organization controls so much of the infrastructure of the digital economy, it’s not good for consumers. And when it has such an outsized influence on the resources flowing to inventors, programmers, and entrepreneurs, it’s not good for innovation.”

So just how much can Google know about our daily lives? Roush paints a scary picture:

“Some morning in the not-too-distant future, you could be awakened by the alarm on your Google-designed phone (Motorola’s Moto X) running a Google operating system (Android). You could ride to work in a Google-powered robot car guided by Google-owned GPS maps (Waze). At your office you’ll log onto your Google (Chrome OS) laptop running a Google (Chrome) browser. You’ll spend your day analyzing documents and spreadsheets saved on Google’s cloud service (Drive) and stay in touch with your co-workers and friends using Google’s e-mail system (Gmail) and social network (Google+).

“The virtual personal assistant on your phone will stand ready to help you with any question instantaneously (Google Now), and if you miss a call from somebody while it’s doing that, they can leave a message on your Google answering service (Voice). At lunch you’ll choose a place to eat using Google’s restaurant guide (Zagat), make a reservation and get directions by talking to your wearable display (Glass), and pay using your smartphone (Wallet).

“When you get home at night, your house’s HVAC system will adjust itself to your presence using its Google-powered thermostat (Nest) and you’ll cook dinner under the watchful eye of your Google-powered smoke alarm (also Nest). You’ll eat in front of your Google-powered television (Chromecast) watching shows hosted or licensed by Google (YouTube, Google Play). Before dozing off you’ll pop a Google-funded pill to optimize your metabolism (Calico) and use your tablet (Android) to read a few pages of the latest mystery novel (Google Play again).

“And throughout the day, of course, everything you read, watch, search for, and talk about will be tracked by Google’s algorithms—the better to show you the targeted ads that generate the high click-through rates that bring in the advertising dollars that subsidize everything else about Google’s business.”

Google’s acquisition of Nest gives it an important piece of the information puzzle – the home – with which to expand the wall of data it builds it builds around its Internet advertising dominance to keep competitors at bay.

“The company has found a way into the infrastructure of the home,” Red Herring said in a piece on the acquisition, noting smart thermostats is a growing market and Google had previously tried to enter the market with its now defunct energy measuring tool PowerMeter. “Now Google has jumped to the forefront of the smart home devices market, through a major money acquisition.”

Backtracking on Privacy of the Nest?

Of course, Google’s acquisition of Nest has stoked privacy concerns. Nest founder Matt Rogers tried to pre-empt these concerns, writing on the company’s blog that “our privacy policy clearly limits the use of customer information to providing and improving Nest’s products and services. We’ve always taken privacy seriously and this will not change.”

But then Nest CEO Tony Fadell backtracked, seemingly opening the door to Google modifying those policies. “At this point there are no changes,” Fadell said. “If there are any changes whatsoever, we will be sure to be transparent about it, number one, and number two for you to opt into it.”

While Fadell and Nest say they have guarded consumer data tightly, Google may slowly loosen those restrictions to merge the data it collects on individuals from the home with what it knows from your smartphone use to work and personal Internet searches. Google has found another important piece of the data puzzle, the home, to build a more complete picture of our lives and keep competitors in Internet services and advertising at bay.

This development bears close watch from consumer advocates and regulators. Based on the early response, it appears that scrutiny will continue.