Stock in News: Google buys Dropcam (NASDAQ GOOG)

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Google Inc(NASDAQ GOOG) has strengthened its home automation offerings by buying surveillance camera maker Dropcam for $555 million. The purchase, made by the Google’s Nest brand, shows the search giant’s executives remain convinced that home automation- which has so far been a relatively small market- will greatly expand in the future.

The addition of Dropcam broadens Google’s ability to compete with companies like Apple (NASDAQ AAPL) and Microsoft (NASDAQ MSFT) . It also gives Google an answer to the home-security companies attempting to market automation add-ons to their existing alarm customers. The move takes Google beyond the niche that Nest serves with its remotely accessible thermostats and fire alarms, and into a broader market.

Google bought Nest for $3.2 billion four months ago and it has remained a wholly owned stand-alone brand. Dropcam will not be run the same way; it will be folded into Nest’s offerings. Nest co-founder and head of engineering Matt Rogers said in a blog post that he thought the two companies were a natural fit.

Google Inc (NASDAQ GOOG) News: Dropcam Acquisition

Dropcam and Nest have a lot of similarities. Both companies use tightly integrated hardware and software with a very limited number of products. The camera company offers only three models: the $149 Dropcam, $199 Dropcam Pro, and $29 Dropcam Tab. All three devices are designed to help customers monitor home activity through motion sensors and video recording.

The Wi-Fi-enabled Dropcam and Dropcam Pro lets users access their camera feeds and even project voice (via speakers) using the company’s mobile app. The camera-less Tab can be placed on windows and doors to monitor activities. Here is a reference to Dropcam website in case readers are interested in learning more about Google new acquisition.

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Google Inc Financial News (NASDAQ:GOOG)

With the home automation market still in its infancy, Google is essentially loading its portfolio to meet potential needs. Nest and Dropcam seem like logical complements that can be rolled into a bigger play. Adding visuals- through Dropcam’s cameras- is an important step to making Nest less a novelty and more a practical system that non-techies will adopt. It’s still very early in the game, but Google looks to be putting the pieces into place to compete.

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