Earlier this month, Google made headlines by acquiring Nest Labs, the connected home startup, for $3.2 billion in cash. Although Nest has received significant fanfare for its smart products, some have argued that the price is a very generous premium for a small company that only a year ago was valued at $800 million. But, perhaps more importantly, why would Google — given its track record of market successes, strong design and engineering talent, and unique brand reputation — choose to buy its way into the Internet of Things (IoT)?