Google, ADT Partnering on Home Security Products – Gadgets 360


Google is paying $450 million (roughly Rs. 3,382 crores) for a nearly 7 percent stake in longtime home and business security provider ADT, a deal that will open new opportunities for one of the Internet’s most powerful companies to extend the reach of its Nest cameras and voice-activated voice assistant.

As part of the partnership announced Monday, ADT will use Nest’s Internet-connected cameras, as well as another device called the Nest Home Hub that comes with an Internet-connected camera, as part of its customers’ security systems.

Both the Nest cameras and Home Hub can be operated through voice commands processed by the Google digital assistant that competes against Amazon’s Alexa and Apple’s Siri in a key area of artificial intelligence.

The alliance could serve as a springboard for a home management product line that Google has been developing since shelling out $3.2 billion (roughly Rs. 24,051 crores) in 2014 to buy Nest, a startup launched by Tony Fadell, who played an instrumental role in creating the iPhone while he was at Apple. ADT, whose roots date back to 1874 when it was formed as American District Telegraph, has about 6.5 million customers.

“Together, we aim to create the next generation of the helpful home — based on new security solutions that will better protect and connect people to their homes and families,” Rishi Chandra, Nest’s general manager, wrote in a blog post.

Nest initially focused on sleek thermostats controlled through the Internet but has been making inroads in home security cameras in recent years. This despite recurring concerns about whether its devices can be trusted to preserve privacy because Google makes most of its money learning about people’s interests through its ubiquitous search engine and then selling ads based on that knowledge.

READ  Forget Samsung's Galaxy S10 And Note 10, This Is The Smartphone To Buy - Forbes

Google has steadfastly promised to keep its Nest devices separate from its advertising operation and other services.

The deal comes less than a week after Google CEO Sundar Pichai was grilled during a congressional hearing focused on whether his company and three other technology giants — Apple, Amazon, and Facebook — have been abusing their dominant services and products to stifle competition. The scrutiny also extends into the Justice Department, which is in the midst of a yearlong investigation into Google’s business practices that could culminate in an antitrust lawsuit before the year is over.

The intense scrutiny makes it difficult for Google to make major acquisitions right now, a factor that could have contributed to its decision to buy a minority state in ADT that comes with no voting power at the Boca Raton, Florida, company. Even so, Google will become the largest stockholder in ADT, based on data compiled by FactSet.

ADT has been struggling since completing a merger with another security firm, Protection One, in 2017. The company lost more than $1 billion (roughly Rs. 7,513 crores) during 2018 and 2019, and then suffered another loss of $300 million (roughly Rs. 2,253 crores) during the first three months of this year.

By the end of March, it had just $118 million (roughly Rs. 886 crores) in cash while carrying a debt load of $10 billion (roughly Rs. 75,130 crores). The $450 million investment amounts to a relative pittance for Google, whose corporate parent, Alphabet, ended June with $121 billion (roughly Rs. 9.09 lakh crores) in cash.

READ  The FTC is Probing Facebook for Antitrust Violations - PCMag.com

The deal also provided a lift for ADT’s stock, which had been trading well below the $14 (roughly Rs. 1,000) price set in an initial price offering in January 2018. At one point earlier this year, the shares dropped below $4 (roughly Rs. 300). The stock soared $4.87 (roughly Rs. 360), or 56.6 percent, to close Monday at $13.48 (roughly Rs. 1000).



READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here