Google to buy start-up Nest Labs for $3.2 bn

All-cash deal is the second largest in Google's history after the $12.5 billion acquisition of mobile phone maker Motorola in 2012

Google has snapped up 'smart' home appliances start-up Nest Labs for $3.2 billion ( £2bn).

California-based Nest makes internet enabled thermostats and smoke alarms that allow people to remotely monitor and control parts of their home from their smartphone. The company was founded by Tony Fadell, the so-called "godfather of the iPod", after he left the position of head of music at Apple in 2008.

After launching its first thermostat in 2011, Nest says its products are now in over a million homes. Late last year the company made its first foray into the UK market, launching its smoke alarm here.

The all-cash deal to buy the company is the second largest in Google's history after the $12.5 billion acquisition of mobile phone maker Motorola in 2012.

Tony Fadell, chief executive of Nest, said in a statement: “We’re thrilled to join Google. With their support, Nest will be even better placed to build simple, thoughtful devices that make life easier at home, and that have a positive impact on the world.”

'Smart' appliances are seen as a huge growth area for many technology firms, who refer to the trend under the umbrella term 'internet of things'. Other start-ups such as tadeo have also made in-roads into connected thermostats and even British Gas has created its own version, the Hive.

Google said Nest would continue to operate as a distinct brand after the all-cash offer closes.

Facebook also announced an acquisition overnight, snapping up New York-based link sharing service Branch for $15 million. The company will form Facebook's Conversations group, according to Branch chief executive Josh Miller, "with the goal of helping people connect with others around their interests."

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