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Google got 20 workers in $40M deal for Fossil’s hybrid smartwatch tech

Fossil and Google announced a $40 million deal earlier this year for a mysterious and unnamed smartwatch technology that Google will presumably use in an upcoming smartwatch. According to a new report, Google may have gotten a little more than intellectual property in the deal — and Fossil may have ended up with the short end of the stick.

The report comes from Wareable, and notes that the deal was for a hybrid smartwatch technology developed by Fossil, which was referred to internally as “Diana.” The tech was built by talent that Fossil acquired through its Misfit buyout in 2015, and reportedly combined some physical watch elements with digital ones.

Alongside that tech, however, Google also ended up with around 20 engineers — and according to Wareables sources, Google was a little more interested in the talent than the intellectual property. That makes the deal more of an “acqui-hire” than a straight-up acquisition of Fossil tech.

Fossil reportedly felt pressured to sell the tech and engineers to Google because of the large expenses associated with keeping the engineering talent. It also felt pressure to recoup the cost of developing its own hybrid smartwatches, like Diana, which reportedly came at a high price for Fossil.

The report also highlights some missteps that Fossil may have made in its Misfit acquisition. Apparently, tensions rose between the Misfit talent and Fossil talent because the company underestimated how much it would have to pay to support the Misfit tech team — and quickly found itself paying out high salaries to the new employees. Not only that, but the two companies reportedly had very different approaches to wearable tech — while Fossil placed more of an emphasis on design, the Misfit team was more focused on using marketing data to create new revenue streams. As a result, talks between Fossil and Google started, and the aforementioned 20 engineers were eventually moved to Google. Wareable’s sources believed Fossil could have gotten much more in the deal.

It’s possible, and even likely, that Google will end up using the tech associated with Diana. The report notes that the hybrid tech uses far less power than other smartwatches, and that could help set an upcoming device apart from other smart watches. Google has long been rumored to be working on a “Pixel Watch,” but those rumors have been around for a few years now without any devices being released.

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