Google plans to purchase Fitbit for an estimated $2.1 billion, the companies said Friday, marking the latest move in the tech giant's aggressive bid to enter the healthcare market.
Google, which reported revenue of $33.6 billion in the third quarter, last month added Dr. Karen DeSalvo, a former HHS official under the Obama administration, as its first chief health officer. She joins former Food and Drug Administration Commissioner Dr. Robert Califf and former Geisinger CEO Dr. David Feinberg on the tech giant's healthcare team.
Fitbit provides an opportunity for Google to sell wearables in both the consumer and healthcare business markets.
Fitbit, founded as a consumer wearables brand in 2007, has been turning its attention toward the healthcare industry as it loses ground in the smartwatch space. In 2018 Fitbit held 12.2% of the global smartwatch marketshare, second to Apple, which comprised 50%, according to an analysis released by market research and consulting firm Strategy Analytics earlier this year.
Fitbit last year released multiple services targeting health systems and health plans—rather than individuals—as customers, including a coaching service for patients with chronic conditions called Fitbit Care and an activity and sleep tracker called Inspire. Neither of those products are available direct-to-consumer.
Fitbit, like Apple, has also struck deals with insurers to subsidize the cost of activity trackers for their members.
"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 James Park, Fitbit's co-founder and CEO, in a statement.
Google's healthcare work hasn't been without controversy.
This summer a former UChicago Medicine patient sued the health system over its sharing thousands of medical records with Google for a research project on predicting patient outcomes, claiming that the health system had not properly de-identified patients' data. Google and UChicago Medicine have said they followed regulations, such as HIPAA, in handling the data.
Fitbit health and wellness data won't be used for Google ads, said Rick Osterloh, Google's senior vice president of devices and services, in a blog post about the acquisition.
"Google aspires to create tools that help people enhance their knowledge, success, health and happiness. This goal is closely aligned with Fitbit's long-time focus on wellness and helping people live healthier, more active lives," he wrote. "But to get this right, privacy and security are paramount."
Google and Fitbit expect the acquisition to close in 2020.