According to a Bloomberg report, Amazon’s $1.7 billion acquisition of iRobot is primarily about mapping users home data.
While Amazon will make money selling devices made by iRobot, a vacuum-cleaner robot company, the real value lies in the data it will reap, as the acquisition will allow the e-commerce giant to get a data collection machine.
Other smart home devices feed only on the data they receive, but do not know details inside a room. With Intel provided by iRobot, Amazon can learn more about a home, what is available and what is needed.
The deal looks like a snip for the retailer, which had $61 billion in cash at the end of June. The $1.7 billion deal represents a 22 per cent premium to iRobot’s share price before the deal was announced.
Tech companies need user data for several reasons, especially for targeted ads. Access to user data and other information allows tech companies to better tailor their advertising to users’ needs.
Although user data continues to be important to the way technology companies make money from advertisers, they have been accused of using it without users’ consent.