Google, Nest and the Rise of the Physical Graph

Google's acquisition of Nest could be the most important development to ever happen in the nascent and horribly named field of the Internet of Things. It's obviously a long-term investment in the future from Google: the buying price of $3.2 billion was much higher than the company's $800 million valuation (a recent $2 billion figure was based on a round of funding that never happened). After all, Nest is just a few years old and it had only two products, one of which is nearly brand new to the market.

Clearly Google sees much more potential in the company than just a sexy-looking thermostat and smoke detector. Google hasn't said anything more than a few vague statements about what it plans to do with Nest, but the acquisition represents the company's beachhead into Internet of Things, probably more accurately described in this context as the physical graph.

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