Google on Friday said it is buying Fitbit for $2.1 billion, hopping into the fitness and wearables scrum dominated by competitors like Apple.
The Mountain View, California-based company is moving back into the fitness sector after previous attempts in wearables failed to take off. Google's Android operating system for smartwatches called WearOS lags behind similar offerings from Fitbit, Fossil and Samsung. Other stabs at wearables, like Google Glass, have also flopped.
Fitbit pioneered, and once dominated, the fitness tracker space, but it has lost market share. The company's market capitalization soared to nearly $10 billion after becoming a public company in 2015. But it has since declined to well below $2 billion this week.
The two companies are hoping that Google's scale and Fitbit's expertise in wearables will give the two companies more of an edge against the competition, namely Apple, which has been growing its revenues because of its wearables category. Fitbit has sold more than 100 million devices and is available on both Android and iOS platforms.
"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," Fitbit CEO and co-founder James Park said in a statement.
Fitbit's stock price soared 15% on the news in Friday trading to about $7.15 per share. Google's stock price notched upward 1% to about $1,269 per share.
Google, which purchased the fitness wearable company for $7.35 per share in cash, is expected to close the transaction sometime next year.
In a blog post, Google also addressed data privacy concerns for consumers. The tech giant, which has been racked by several data privacy scandals, said health and wellness information will never be sold to advertisers for Google ads. Fitbit said its privacy and security guidelines won't change and that it will continue to be transparent about the data it collects.
— The Associated Press contributed reporting.