Google Acquires Fitbit for $2.1 Billion – What’s That Mean for Healthcare?

The big healthcare news today was something we’d heard rumored for a few days already.  Google will be acquiring Fitbit for the tidy sum of $2.1 billion (See the Google announcement and Fitbit press release for details).  This number is particularly interesting since Fitbit’s IPO in 2015 that valued it at $4.1 billion.  Hard to process a loss of $2 billion in 4 years, but Fitbit has been on a steady decline since it’s IPO.

Considering the billions of dollars Google has laying around, it’s hard to argue that this bargain buy is going to be a bad thing for Google that has been investing a lot of money in the wearable space. No doubt having the Fitbit brand under them and more importantly the wearable expertise, experience, and patents are going to be extremely valuable to Google as it battles other tech companies in the wearable space.

While this is an interesting play for Google, it begs the broader question: What Does Google’s Acquisition of Fitbit mean for healthcare?

I’ve long been sharing that the problem with Fitbit for healthcare is that the data it was collecting wasn’t medically relevant. When you took your Fitbit data into the doctor, they had no idea what to do with it or had it was clinically relevant to them. The reality is that it hasn’t been clinically relevant to doctors and so they haven’t done much with it beyond uploading it to the EHR to be stored where no one sees it.

The hope was that Fitbit and many other health sensors would become much more sophisticated to the point that they became medically relevant. After my experience talking with digital health innovators at the HLTH conference this week, I’m confident that we’re heading this direction. It’s just going to take a few more years for the FDA to approve all these devices and then for the technology to be incorporated into the healthcare clinician workflow. Given this, I don’t think this acquisition will mean very much for healthcare in general. At least not for now.

The good news for Google is that they don’t need Fitbit to be medically relevant for them to get the value they need. Google just needs consumers to perceive medical value and the data from these devices to inform their clinical efforts. The former is something we’ve addressed before when Apple announced the Apple Watch’s ECG functionality. Go and read that article to see why it doesn’t matter if Google is medically relevant. They just need to sell more devices and the perception of clinical relevance is enough to sale devices.

The data end is a little more tricky. It’s obvious that Google and Fitbit realized this would be an issue with the acquisition and so they both included comments about data privacy in their announcements linked above. The first point worth making is the acquisition was made by Google’s device team and announced by Rick Osterloh, Google’s Senior VP of Devices and Services and not Google’s ad team or data team or even Google’s health team. They understand what I described above that Fitbit is not medically relevant (yet?) and this is a device play for now.

In the announcement, Rick Osterloh from Google also pointed out that “Fitbit health and wellness data will not be used for Google ads.” Plus, he highlights Google’s standard lines about Google putting you in control and providing transparency of how and what data is being collected by Google. To their credit, they do provide a lot of that transparency and the tools to export and remove your data (see this article for details). Of course, how many people that use Google and their products know this fact. I’d suggest not many. Transparency and knowledge of transparency are two different things. It will also be interesting to see how the announcement of Google Ads not using this health and wellness data will apply when a non-Google Ads product wants to tap into this data. Time will tell on that one.

My favorite privacy line from this announcement though came from Fitbit’s press release, “Strong privacy and security guidelines have been part of Fitbit’s DNA since day one, and this will not change.” Let’s just say that it’s amazing how quickly people forget that Fitbit exposed users’ sexual activity (even more ironically, it was discovered through a Google search) as we shared in an article back in 2011. Sounds like a PR person must have written that Fitbit’s DNA was about privacy and security from day one. Unfortunately, the facts don’t seem to line up here. Maybe that incident changed their culture to one of privacy and security, but last I checked most people don’t want their sexual activity shared online.

I was also intrigued by the numbers shared by Fitbit. The announcement says they’ve sold more than 100 million devices and support more than 28 million active users. I guess that leaves 72 million or so devices for RecycleHealth to share with others who can’t afford the devices. This discrepancy is likely why Fitbit’s stock price has suffered. We all know the diminished returns from Fitbit tracking that happens. We’ll see what form factors Google continues as far as bands, watches, etc or if they instead choose to just expand the functions available on Android smartphones.

All in all, this acquisition makes sense to me. With Fitbit performing poorly in the market and Google needing that expertise, it will be interesting to put them together. There is some overall concern I have with the privacy of the data, but it’s not a huge concern for me. The conversation around privacy will become much harder once the data collected by health sensors is medically relevant.

What are your thoughts on Google’s Acquisition of Fitbit?

About the author

John Lynn

John Lynn

John Lynn is the Founder of the HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

1 Comment

  • All I can say is that will make me finally replace my Fitbit(s). There are plenty of other devices out there, I’ve just been waiting for one that was advanced enough to induce me to go for it.

    Consulting in that specific space on the healthcare and fitness side I have looked at many of them, and there are some that will work for certain use cases but none has so far really jumped out. Those that do are still haltingly expensive (like Garmin?) but some of the latest releases (Biostrap?) are very intriguing.

    In any case I think Google has proven over and over it can not be trusted with personal data so bye-bye Fitbit. Google just runs on its own principles and can readily (somehow) get away with whatever/however it wants.

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