A new player in the home: Google

As it enters the realm of home improvement, Google is betting big that a fancy thermostat and a clever smoke detector are just the beginning of a profitable pipeline of products to emerge from its new California-based possession.

The search-engine giant Google spent a mind-bending $3.2 billion for Palo Alto, Calif.-based Nest Labs, maker of the aforementioned home items. To put that figure in perspective, Stanley Works’ acquisition of Black & Decker back in 2009 was a $4.5 billion deal.

B&D was and is one of the most recognizable brands in America. Nest, founded in 2010, has, for all intents and purposes, two products.

The smart thermostat has an Apple-like simplicity to its design. The smoke detector doesn’t beep annoyingly when batteries are low; it talks soothingly. And Nest’s mission is admirable: to reinvent unloved but important devices in the home.

But $3.2 billion? With $50.2 billion in 2012 revenue, Google can afford to take chances.

“They’re already delivering amazing products you can buy right now — thermostats that save energy and smoke/CO alarms that can help keep your family safe,” said Larry Page, CEO of Google. “We are excited to bring great experiences to more homes in more countries and fulfill their dreams.”

Nest co-founder Tony Fadell has solid Silicon Valley credentials, as he is credited with helping Apple design both the iPod and the iPhone. Nest will continue to operate under the leadership of Fadell and with its own distinct brand identity.

Fadell, CEO of Nest, said: “We’re thrilled to join Google. With their support, Nest will be even better placed to build simple, thoughtful devices that make life easier at home and that have a positive impact on the world.”