The news caused Fitbit’s stock to spike 17 percent today and comes after rumors of the purchase circulated earlier this week, as first reported by Reuters. Google’s parent company Alphabet’s stock rose by roughly 0.8 percent, CNBC reported. Google will pay $7.35 per share in cash as part of the deal.
Bringing one of the leading health tracking firms into the fold will help Google to better compete in the wearables market dominated by Apple and Xiaomi.
Google’s Wear OS already offers apps and services like Google Fit and Runtastic, but Fitbit clearly has the expertise (and the data) to be worth the money.
“Over the years, Google has made progress with partners in this space with Wear OS and Google Fit, but we see an opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market,” Google’s Senior Vice President of Devices and Services, Rick Osterloh, said in a press release today.
“Fitbit has been a true pioneer in the industry and has created engaging products, experiences and a vibrant community of users. By working closely with Fitbit’s team of experts, and bringing together the best AI, software and hardware, we can help spur innovation in wearables.”
Executives from both companies appeared extremely keen to stress health data won’t be used to serve advertising, which is how Google makes the majority of its revenue.
“Fitbit will continue to put users in control of their data and will remain transparent about the data it collects and why,” the firm’s own announcement said. “The company never sells personal information, and Fitbit health and wellness data will not be used for Google ads.”
Osterloh echoed the stance, saying: “We will be transparent about data we collect and why. We will never sell personal information to anyone. Fitbit health and wellness data will not be used for Google ads. And we will give Fitbit users the choice to review, move, or delete their data.”
Fitbit made its name offering smart devices and activity trackers to help users monitor their exercise progress, sleep patterns and day-to-day activity. Since being founded in 2007, the firm has sold more than 100 million devices and claims to have 28 million active users.
But its true value, at least for Alphabet, is likely in the data. Fitbit notes in the release detailing the definitive agreement with Google that its platform is “powered by one of the world’s largest databases of activity, exercise and sleep data and Fitbit’s health and fitness social network.”
Fitbit said any of its future products will continue to remain “platform agnostic” across both iOS, which is the mobile OS owned by Apple, and Android, owned and managed by Google.
“This agreement underscores our belief in how important wearable tech has become, and it’s also an exciting opportunity for Wear OS,” said Sameer Samat, who is the vice president of product management for Android, Google Play & Wear OS. “We’re looking forward to collaborating with Fitbit to bring the best of our smartwatch platforms and health applications together.”
