Eranet News on January 23th,2014.It took Google $3.2 billion in cash last week to snatch up digital thermostat company Nest. And it took a small startup about 24 hours to hack together a working equivalent of Nest's signature product a few days later.

The search giant can obviously afford to pay a rich price, and scarily high valuations are nothing new in Silicon Valley. Yet, the Nest purchase also illustrates how cozy the Valley is - and how that coziness removes any check on more sober pricing. Higher prices are in everyone's short-term interest. 

Nest makes smart electronics for the home, starting with that thermostat and more recently an intelligent smoke detector. Nest makes sleek, highly functional products developed by a team led by Tony Fadell, who was formerly with Apple, and is sometimes known as the father of the iPod. 

Founded in 2010, Nest had three rounds of investment, according to Standard & Poor's Capital IQ, a research service. It was looking to raise $150 million, which would have valued the company at more than $2 billion, when Google swooped in. 

The Google deal is a party for Silicon Valley insiders. Not only is Fadell a prince of Silicon Valley with deep roots in Apple's rise, but his initial investors included Google's own venture capital arm, Google Ventures, as well as the top-tier venture capital firms Shasta Ventures and Kleiner Perkins Caufield & Byers. Shasta Ventures is a superwinner - earning back the full amount it raised for its fund of $200 million, according to Tech Crunch. Tech Crunch and Dan Primack at Fortune both reported that Kleiner earned 20 times its money on an investment of roughly $20 million.

This source from Internet.