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Why Nest didn’t build Google’s competitor to the Amazon Echo

What happened to the consumer hardware arm of Google? It’s complicated.

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When Google unveiled a new smart device for the home in May, many commentators online asked the same question: Why wasn’t Nest, Google’s smart-home company, unveiling it?

Fair question.

Acquired in 2014 for $3.2 billion, Nest brought CEO Tony Fadell, a former Apple exec who had created the iPod, and a band of Apple designers and engineers to Google. At the time, several publications and pundits said that Nest was bringing to Google not just its devices, but Apple’s sensibility and execution — a blueprint to be the internet giant’s de facto consumer hardware arm.

I’ve spoken to several people close to the deal, and it seems that was never the explicit strategy of Google’s leaders.

More importantly, its latest hardware, Google Home — a voice-controlled speaker and assistant that rivals Amazon’s Echo products — is pivotal to defending the company’s core search and information services. (Read more about the device and its strategy here.) Google had to build it itself.

“We’ve been focusing on media, on search, on voice — those are things that our team does well,” Mario Queiroz, the Google VP who leads the project, told me when I asked about Nest.

“The living room or the home is such a broad space that ...” He paused, then continued. “We’re actually working with them to make sure there’s close integration with Nest products.”

That’s true. Google said Home will be compatible with Nest’s trio of home devices whenever it comes to market. Nest has focused more on taking home utility products — thermostat, smoke detector, security camera — and tying them to apps and each other, not artificial intelligence devices like Home and Echo.

And despite what commentators predicted two years ago, Nest likely worked more on software since its acquisition. According to sources, the edict from Google was to ship hardware as well as build out a system that fills the gaps with communication and operability in connected devices.

“The marching orders were to create a broad platform and invest in the longer term,” said an investor familiar with the initial deal.

Whether Nest’s troubles came from failing to meet those marching orders or a change in them, possibly around the Alphabet reorganization, I still don’t fully know. Fadell was given control of Google Glass in early 2015, a sign that he was entrusted with more Google hardware. He left that project, Nest and Alphabet earlier this month.

I do know that Nest leadership was adamant about operating fairly independently from the Google mothership. For some who worked there, that was a handicap.

Nest did have considerable power at the internet company, including a sizable budget. A former employee told me the leadership there didn’t know how to “effectively wield such power and ultimately work with Google.” Others have echoed that.

Did Nest work with Google at all on Home, I asked the product’s boss?

“It’s a continuum,” replied Queiroz. “We’re designing one product; they’re designing another. And on the connection of those two products, we’ve been working together.”

Read this next: Meet the product chief Google picked to fight Apple and Amazon for control of your home

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