Why Google Spent $3.2B on Home Hardware Firm

Jan 14, 2014 8:08am

Morning Money Memo…

Innovation and a push into new markets is a big reason why Google spent $3.2 billion to buy Nest Labs. Google is making a big bet on hardware, moving beyond its massive search and Android business.  As people go online to organize, read, search, entertain themselves and socialize, the Nest purchase represents something new: connected home devices to the Internet.

Nest, run by former Apple designer Tony Fadell, is best known for its innovative thermostats and smoke detectors. The thermostat aims to learn how people like their homes to be heated and cooled and adjust automatically.

Google CEO Larry Page says Nest is “already delivering amazing products you can buy right now — thermostats that save energy and smoke/CO alarms that can help keep your family safe.”

About 20 million DirecTV customers are without The Weather Channel because of a dispute over fees. The Weather Channel hiked how much it charges the satellite provider. DirectTV says that means its subscribers would have to pay more. In a statement the company called the loss of The Weather Channel “regrettable,” adding that it would continue to provide customers its WeatherNation channel

Cable TV operator Charter Communications wants to buy the much larger Time Warner Cable. The cash and stock deal could be worth up to $38 billion. Charter says it’s prepared to bring its offer to shareholders after Time Warner Cable’s board rejected the bid.

So far, 2014 doesn’t look like last year’s raging bull market on Wall Street. Since January 1, stock averages have lost about 2 percent. The Dow Jones Index has been down four days in a row and the market Monday had its biggest one-day loss since last September. Most Asian stock markets sank overnight. Japan’s Nikkei 225 tumbled 2.1 percent. “Equity markets and risk assets in general are having a decidedly shaky start to the year,” said Mitul Kotecha, head of global markets research for Asia at Credit Agricole CIB. “Worries ahead of fourth-quarter earnings releases and perhaps concerns about the economy in the wake of the disappointing U.S. December jobs report weighed on U.S. equities overnight.”

America’s biggest bank, JPMorgan Chase, announced lower quarterly profit, largely because of expensive legal settlements and disputes. Fourth-quarter quarter profit fell to $5.3 billion from $5.7 billion last year. Revenue declined slightly, largely because of a sharp plunge in mortgage originations.

American Airlines and US Airways next week will begin selling tickets on each other’s flights in a move toward combining fleets after their 2013 merger. It’s a step toward eliminating the US Airways name in about two years and operating flights under the American banner. The airlines have announced a code-sharing agreement to initially cover most flights.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow

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