I don't think so. Nest was in the middle of closing a $150M round at a $2B valuation. That doesn't smell like a company going out of business, that sounds like a company preparing to scale like crazy.

Fadell has intimate knowledge of Apple's scaling troubles—LaLa, iTunes Store, App Store, MobileMe, etc—and Apple has infinite money. Building truly scalable web services is no easy task, and Google is head and shoulders more capable than anybody else.

Do not look at Nest as a thermostat company. Look at what they could be 10 years from now—the timescale Fadell is surely thinking on—and you begin to understand the real scaling issues they will face.