Mark Bergen, writing for Recode:
That budget was set for three years, according to multiple sources
familiar with the deal. Unless Alphabet agrees to continue funding
Nest, that budget runs out at the end of this year. Several
sources said that initial budget was around $500 million annually.
To keep employees from leaving after the acquisition, Google
created a vesting schedule that prevents Nest’s executives from
cashing out their shares before a certain date — that date could
come as soon as this year. In addition, according to sources, as
part of the acquisition, Nest and Google agreed on a sales target
for the company: $300 million annually.
Two years later, Nest still could not hit that target alone — it
did it only after adding sales from Dropcam, which Nest acquired
for $555 million six months after joining Google.
Keep in mind that Dropcam founder Greg Duffy wrote:
I can’t publish Dropcam’s revenue, but if you knew what percentage
of all of Alphabet’s “other bets” revenue was brought in by the
relatively tiny 100-person Dropcam team that Fadell derides, Nest
itself would not look good in comparison.
The knives are coming out for Fadell. I’m curious if Fadell is using Alphabet’s PR team to help him manage this, or if he has his own PR team within Nest. Whoever it is, they’re not serving him well.
★ Thursday, 31 March 2016