That (advertising) thing you do

First, think about advertising. “We generate revenues primarily by delivering relevant, cost-effective online advertising in our Google segment,” the company wrote in its latest earnings statement, referring to one of the two categories of revenue Google breaks out: advertising and other nonadvertising lines of business as well as the considerably smaller Motorola Mobile division, which contains mobile devices that came from Google’s Motorola acquisition. In other words — advertising is still a huge business for Google.

Angela McIntyre, a Gartner analyst who covers the connected home and wearable devices, thinks the Nest deal could help Google’s ad business.

“Hardware products are almost a means to an end, to be able to sell information that leads to better advertisements and spots themselves, of course, on Google search and potentially new services for homeowners,” McIntyre said in an interview with VentureBeat.

Nest data could help advertisers and marketers learn more about people who own Nests — and perhaps just people in general.


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“Having a product such as the Nest will enable them [Google] to have new insights about consumers and their energy usage and daily living patterns,” McIntyre said. “Because the Nest itself learns about people — whether they’re home, what are their hours — it could tell what types of rooms they’re in and potentially sensors in there could be able to tell activities of what a person is doing during the day. And that information could be of interest to a broad range of marketers as one a group of folks that could be interested in that.”

So Googlers have got to be scratching their heads right now to think about how they could improve ad targeting with Nest data — assuming they can get their hands on it.

And data from Nest could also be layered on top of other data Google has. Cloud computing Larry Carvalho of RobustCloud envisions Google gaining data it can use to sweeten its maps.

“Google has a huge cartography lead over competitors with detailed and up to date maps. Just last week they used benefit to enroll Audi, GM, Honda & Hyundai on the Android platform in cars. Overlaying location information from Nest with energy and security can help Google with a broader platform to finally make a smarter home a reality.”

And information on when customers are home, device battery levels, energy savings, temperature, humidity, light, and the presence of smoke or carbon monoxide at home eventually could get pushed from Nest’s data collection other Google services and devices. Google’s Android mobile devices (and iOS devices too, surely) could show it right alongside data about calendar appointments, restaurant recommendations, and other information gleaned from a Google user’s digital exhaust.

Then Google could conceivably data from all Nest devices in a city, state, country, or the world, even, anonymous and show information in aggregate. Maybe even Google could build some algorithms to display trends in comfortable home temperatures, for instance.

This data could appear in a new standalone Google desktop application, with dashboards, reminders, and other useful features. And Google could figure out a way to integrate the data with its all-powerful search engine to help it further transform from a directory of information into a platform for data. And while Nest can broadcast its data to it, new devices from Google and even other companies could all connect in, too.

“Google is one of the forerunners” in the race to become a central point for many connected devices, McIntyre said, and highly visible devices like Nest thermostats and smoke detectors could be a nice stake in the ground.

From there, Google could build software to autonomously take action based on all the data coming in. This is really the sort of applied artificial intelligence at Google’s core. Data from Nest and other connected devices could be foundational technology for such services.

The common term for this is an intelligent agent or virtual assistant, which can learn from all of the new data becoming available to it and then recommend what people can do in the future. It might even be able to set up appointments or make purchases. Google could be interested in making those sorts of enhancements to existing services like Google Now.

Clearly, the deal is exciting. Now, if only Google brass can talk Fadell into backing down on his no-Nest-data-for-Google position. …

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