A number of Nest employees that were previously confused by Google’s decision to spin off the company into a separate entity only two years after purchasing it are even more befuddled by the move once the tech giant announced its intentions to reabsorb Nest earlier this week, CNBC reports, citing the firm’s co-founder Tony Fadell. According to the entrepreneur who left the position of Nest CEO following its first restructuring in mid-2016, separating the company from Google was the polar opposite of what he deems is the “most essential” goal of both entities – integrating their products and services into one another in order to deliver value that’s greater than the sum of its parts. Mr. Fadell also confirmed previous rumors that Google was mulling over the idea of offloading Nest in 2016, presumably at a significant loss. It’s presently unclear what prompted the company to stick with its division, but the fact that its Motorola failure which ended in its sale to Lenovo happened just two years earlier may have played a part in the decision as the firm’s management might have sought to avoid a second high-profile M&A debacle that would have displeased stockholders in such a short period of time.
Another former Nest employee cited by CNBC suggests Google severely mishandled the company after separating it, with the former startup and the Mountain View-based Internet giant’s own hardware division occasionally even working on extremely similar solutions such as smart home communications protocols. Coupled with a general lack of cooperation between the units, Google’s second most valuable acquisition to date valued at approximately $3.2 billion was often wasting money either directly or by competing with its sister firm’s own products after being separated into a standalone entity under Alphabet’s corporate umbrella, as per the same account.
Nest is now rejoining Google only a year and a half after being spun off, with its second restructuring also being set to lead to the departure of the firm’s second co-founder, Matt Rogers. Critics are arguing the tie-up is indicative of a lack of long-term business strategy at Google and irresponsible handling of even the most valuable assets. Google said that joining Nest to its own hardware division led by Rick Osterloh will allow it to do a better job at integrating its artificial intelligence technologies into Nest’s products. The Nest brand isn’t expected to be discontinued as part of the move.