A rumor about Google planning to buy Fitbit had been circulating for just about a week, before Google announced that it really do acquire the popular wireless-enabled wearable technology company.
With a price of approximately $2.1 billion with Google paying about $7.35 per share for the company, Google is aiming to be more capable in competing against its rivals in the wearable industry, mainly the Apple Watch and Xiaomi.
Fitbit is already popular in the fitness market, but for all its time, the company has long struggled in the "smart" part of its products.
As for Google, it has a long list of "smart" products. It also has wearable devices under the Wear OS umbrella. But those devices' sales are pale if compared to Apple or Xiaomi. Moreover, Google doesn’t have a flagship Wear OS device, the way it has with the Pixel for Android.
“With Google’s resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster, and make health even more accessible to everyone,” said Fitbit co-founder and CEO James Park in a statement.
By joining forces, the two can fill in each others' gap. According to Google on its blog post:
"The transaction is expected to close in 2020, subject to customary closing conditions, including approval by Fitbit’s stockholders and regulatory approvals," said Fitbit on its press release.
At this time, Fitbit has 28 million active users worldwide and has sold more than 100 million devices. Its market capitalization was just under $10 billion after becoming a public company in 2015, before plummeting down to $2 billion.
When rumors of a potential buyout by Google surfaced, Fitbit shares soared by almost 30%.
Before Google and Fitbit inked their contracts, another contender that was also interested in this popular wearable maker was Facebook.
According to a report by The Information, social giant and tech behemoth Facebook was also eyeing on Fitbit, but failed to acquire it because Google was willing to pay a lot more than Facebook.
For reference, Google ended up paying double of what Facebook had offered.
Facebook was interested in Fitbit, mainly because it doesn't have that much hardware presence. While the company has physical products like the Oculus VR headsets and the Portal smart displays, the two are still supplementary to smartphones.
Fitbit here, moves on its own market, meaning that it's completely in a different league than Facebook's existing hardware products.
But then again, Facebook backed down, suggesting that the company isn't completely in a hurry to enter the smartwatch and the wearable market. This also suggests that Facebook doesn't really see Fitbit as a great companion to its existing offerings.
