ADT, Google Developing New Home Security Products, Services

The home security company ADT is banking on a partnership with Google’s smart-home services to help boost its revenue.

A story in The Wall Street Journal on Monday (June 28) examines this partnership, which was forged at a time when ADT is struggling to turn a profit.

Google announced last summer that it had entered into a long-term partnership with ADT to create what the two companies called the next generation of smart-home security. The agreement saw Google paying $450 million for a 6.6 percent stake in ADT.

The companies said at the time that they planned to integrate Google’s hardware and services into ADT’s products and its team of more than 20,000 professionals, and that they would spend another $150 million for marketing, technology, product development and employee training. The deal widened the potential reach of Google’s own smart-home devices, led by its Nest products. Google bought Nest for $3.2 billion in 2014.

ADT began selling Google hardware such as smart displays and speakers in April. Now, the two companies are trying to integrate their devices by doing things like making sure ADT systems recognize Google voice commands, ADT Chief Financial Officer Jeff Likosar told the Journal. “We envision that over time this would be our core offering,” he said.

They’re also working on new offerings, such as cameras, doorbells and analytics capabilities. For example, if someone tripped an alarm by opening a customer’s front door, the smart-home system could glean info from other devices to determine the threat level of the incident.

ADT gets its revenue through home security installations and by providing monitoring systems to homes and businesses. Likosar said the partnership with Google should bolster ADT’s revenue. The company suffered a net loss of $48 million during the first quarter of the year — partly due to a decline in installations during the pandemic — and hasn’t reported a profitable year since going public in 2018.

The two companies face competition from Amazon, which has acquired the video doorbell company Ring and SimpliSafe in recent years.