Jordan O'BrienAlphabet supposedly explored getting rid of Nest, its home automation unit, in 2016 – although the company is said to have failed to find a bidder. The report from Reuters cites three people at Google who had knowledge of the attempted sale, which was known as Project Amalfi.
Nest hasn’t had the best of times under the ownership of Alphabet, with the company often criticised for being slow to market with new products. This had been blamed on the company’s former CEO, Tony Fadell, who was meticulous when it came to creating products – and reportedly never satisfied, leading to product delays. In June 2016, Tony resigned from the home automation company.
Since then, Nest hasn’t really had a big hit. The company has launched new versions of its IP camera, such as the Nest Cam Outdoor and Nest Cam IQ, but nothing truly innovative. Given the rapid development of the home automation market, Nest is quickly finding itself unable to keep up with more agile start-ups and well-funded competitors.
Despite Tony Fadell being blamed for much of Nest’s struggles, some former employees claim that things have been made worse since his departure, with less creative freedom available to individual engineers.
Much of Nest’s struggles can be traced back to Alphabet’s CFO Ruth Porat. It was Ruth’s idea to branch Google-owned companies away from the search engine, and to create Alphabet. She also ensured that the ‘Other Bets’ division, which includes Nest and other riskier companies, paid their own way – rather than being subsidised by the company’s more profitable units. This has supposedly led to Nest lacking in some desperately needed investment.
It’s not overly surprising to see Alphabet trimming the fat. The company has been ridding itself of loss-making companies recently, with Boston Dynamics having already been sold to Japan’s SoftBank Group earlier this month.
Alphabet’s attempted sale of Nest last year was what supposedly led to Tony Fadell eventually standing down, although no deal could be reached with a third-party to acquire the ailing firm. It’s not known whether Alphabet has abandoned its efforts, or if it is still exploring the possibility of a sale.