If there was anyone who remained unconvinced that fitness tracking devices were nothing more than a simple fad, soon to pass in the coming years, some big news became official last week that might convince him or her otherwise.
One of the biggest companies in the tech industry (or on the planet for that matter) just made a massive investment via an expensive acquisition of arguably the top name in the fitness tracking world. Google is so prominent that it has created its own verb describing the act of looking for an answer to an inquiry through the company’s search company – “google it.” Meanwhile, Fitbit enjoys so strong an association with these devices that people often refer to fitness trackers that are made by other companies as “fitbits.”
Google made a massive purchase this week when its parent company Alphabet bought Fitbit for more than $2 billion, apparently raising some eyebrows in the process, according to an article from Bloomberg. Story author Gerrit De Vynck detailed the news, writing:
Alphabet Inc.’s Google agreed to buy smartwatch maker Fitbit Inc. for $2.1 billion in cash, a move that could shore up the internet giant’s hardware business while also potentially increasing antitrust scrutiny. Fitbit shares jumped 16%.
Google will pay $7.35 a share for San Francisco-based Fitbit, according to a statement Friday. That represents a 71% premium to Fitbit’s stock price before Reuters reported Google had made a bid on the company on Oct. 28. The acquisition is Google’s second major purchase this year, after it agreed to pay $2.6 billion for cloud software provider Looker in June.
The deal is sure to attract regulatory scrutiny. State and federal authorities are investigating Google for potential anti-competitive practices related to how it handles consumer data and operates in the digital-advertising market. Though Google isn’t a leader in smartwatches or fitness trackers, regulators in the U.S. and elsewhere will likely have questions about what Google intends to do with the data Fitbit users have shared over the years, including intimate health and location information.
The companies addressed the likely concerns by pledging to be transparent about the data Google collects and why. “Strong privacy and security guidelines have been part of Fitbit’s DNA since day one, and this will not change,” according to the statement. “The company never sells personal information, and Fitbit health and wellness data will not be used for Google ads.”
Fitbit will continue to be available on both Android and iOS devices.
Watching the changes in the stock market is always an intriguing endeavor, but this week should prove even more interesting following the industry splash.
To read De Vynck’s full write up, click here.