One morning in the autumn of 2017, Fitbit employees arrived at work to find something unusual in their inboxes. It was a company-wide survey asking them to give anonymous feedback on Fitbit’s leadership. The San Francisco office had never felt bleaker: employee turnover was exceptionally high, Fitbit’s first smartwatch wasn’t making an impact, and layoffs from earlier that year had cast a shadow over those who remained. Some employees had written letters to the board asking them to remove James Park as CEO, and were encouraging others to do the same.

Morale was battered and leadership asked HR to help turn things around – starting with the survey. The results were shared during an all-hands meeting a few days later. Executives, including Park, were present for a brutal shakedown: employees had lost confidence in leadership and they felt like Fitbit had lost its way, according to the feedback shared by staff. The mood in the room became incredibly tense. “It felt like the company had lost its vision,” says one employee who was present. “That was the moment we felt the ship was sinking.”

Throughout the following year and into the summer of 2019, there were successes at Fitbit, in particular the popularity of the first Versa smartwatch, but according to several sources who spoke to WIRED on condition of anonymity, Fitbit was plagued by management issues, ever-changing priorities and high staff turnover. This led to a focus on incremental product upgrades, with little effort put towards more significant future-facing technologies. Work with the Food and Drug Administration (FDA) to add more health features to its devices, such as sleep apnea detection, was dragging along. Apple, meanwhile, was leading the wearables market and was innovating at a much faster rate. Fitbit had lost its way.

But some staff had started to notice a change in messaging. Internally, the directive from on high was to make sure things were in good shape and publicly, Fitbit was puffing out its chest more than usual, boasting about its unrivalled troves of user health data. Something was happening, but no one outside the top brass knew, exactly, what.

Then, on November 1, moments after a press release went out, Fitbit CEO James Park held an all-hands meeting - “probably the most attended all-hands for two years” - to make an announcement: Fitbit had agreed to be acquired by Google for $2.1 billion (£1.6bn). Some employees were blindsided by the news, but most were relieved. Failing Fitbit, it seemed, had been rescued.

Some had actually seen the Google news coming for a while; more specifically, since April 2018, when Google and Fitbit announced a partnership that would push both companies further into the healthcare sector. The collaboration was, per a joint press release at the time, to “accelerate innovation in digital health and wellness,” and would involve Fitbit making use of Google’s Cloud Healthcare API.

After the announcement, there were whispers around the San Francisco office that Google was “taking a look at the engine,” according to one source familiar with the matter. “There was talk that Google was eyeing us up,” they say. “Some people stuck around longer just because they thought Google would buy us.”

There was also a sense that Fitbit was trying to “buddy up” to Google, sources say, encouraging project managers to find ways to work with the company. This year, Fitbit tried to get Google Assistant running on the Versa 2 alongside Alexa, but Google was less willing than Amazon to make this happen, and ultimately didn’t have the APIs Fitbit needed for it to work. Nonetheless, several months later, Google finally staked its claim.

The acquisition won’t be approved until 2020. If and when it is – and there’s still a big if – Fitbit will be absorbed into Google, rather than siloed off under the Alphabet umbrella. Nest, a previous acquisition, remained as its own entity under Alphabet for a period until it was ingested by Google’s hardware division. And Google will be devouring a genotype of several startups Fitbit has acquired over the years: smartwatch makers Pebble and Vector, health management platform Twine Health and Coin, the payment startup Fitbit bought for $7 million in 2016 and the basis of Fitbit Pay.

Whether you saw the Google deal coming or not, you didn’t need an insider’s perspective to know that Fitbit needed rescuing. The company has long been floundering while Apple swallowed up the smartwatch market at one end, and cheaper fitness trackers, in particular Xiaomi’s budget Mi Band series, attracted people away from its core business.

Fitbit had been an acquisition target from the moment it went public in July 2015. At the time, the company had a market capitalisation of $9.8bn. In November 2016 it was hovering at just a little over $2bn. “By the fall of 2016 the base business was starting to weaken a bit,” says one source who was closely involved with Fitbit’s strategic planning. “Weaknesses in the US market were showing, and it seemed like every earnings call we were tumbling back down the stairs.” A Fitbit spokesperson declined a request for comment on the company’s product development strategy and corporate governance.

Rewind ten years to the first Tracker and Fitbit’s original raison d'être was to make fitness accessible to anyone. It was, in a sense, the anti-Nike. You didn’t have to be a weekend warrior to get in shape; you could do it just by getting off the couch and going for a walk, and all you needed was a gadget on your wrist. And hey, why not buy one for your grandmother too?

But over time, the mission became less effective. “Fitbit’s mistake was that it promised behavior change, but it behaved like a hardware company,” says one source close to executive decisions at the company. “We had the ability to know a lot about our users, but people don’t want to be told what they did, they want to be told what to do. It’s Fitbit’s greatest missed opportunity.”

For Google, Fitbit unlocks a market of 28 million users and a wealth of health data that could, in theory, allow it to fix that missed opportunity. That’s not to mention a treasure trove of data collected over the years, including several billion nights of sleep. The move also puts Google in closer competition with Apple’s ResearchKit, which allows people with iPhones and Apple Watches to participate in health tracking and trials with academic partners.

As for Fitbit, it will finally get something it has always lacked: resources. “The company just doesn’t have the resources to invest in the FDA stuff, and for a long time it’s been going in circles,” says one current Fitbit employee who asked not to be named. A couple of years ago, Fitbit assembled a small team to work with the FDA on certification for medical grade health tracking. They hired external contractors to teach them about the processes, and Fitbit managed to get onto a pre-certification program with eight other companies including Apple, Samsung and Alphabet-owned Verily. “We were included on the fast-track program and thought it was going to speed everything up, but it just went nowhere for us,” says one source who was involved in the discussions.

In September, Fitbit announced a partnership with FibriCheck in Europe to let users track signs of atrial fibrillation, a common abnormal heart rhythm, but the company has yet to launch a native app similar to Apple’s anywhere in the world. In addition to this, James Park has long said the company was working on sleep apnea detection, which was made possible by the SpO2 sensor, which measures blood oxygen saturation, that has featured on many of its recent products. To date, no such feature has been announced but Fitbit employees believe these sorts of failures could easily be tackled with the right long-term support and investment.

“Fitbit still has a fair bit of cash if you look at the balance sheet,” says one source. “They’ve burned a fair bit of money in the last year but it’s still north of $500m in cash and marketable securities, so the company could have kept going for a couple of years. But I think Fitbit’s taken it as far as they can go.”

Sources say Fitbit’s product timeline has long been underpinned by a philosophy that stymied innovation. “Fitbit has two priorities: 50 per cent margins and long battery life,” says a source. “If your idea didn’t meet those two credentials, it was cast aside.”

One example of this was the low-power operating system that launched on the Ionic watch, which had a longer battery than the Apple Watch, but lacked a number of key features. At one point during the development of the Ionic – then codenamed Higgs – Fitbit engineers got an internal build of Spotify running. "They [Spotify] didn't want to do it at first," says one source, explaining that Fitbit battled to make the partnership happen but then the low-power operating system didn’t have the capacity to run Spotify’s digital rights management software. Negotiations fell apart and instead Fitbit turned to Pandora and Deezer for on-device music services.

Fitbit has lost a lot of engineering talent in recent years through layoffs and more tempting offers from other companies down the road in San Francisco. Sources say Fitbit’s engineering offers often weren’t competitive. Within a year of joining the company, almost all of the Pebble engineering acqui-hires had left. “It reached the point where recruitment were just hiring for attrition,” says one source. “For a while I felt like we were having leaving parties every week.”

The result? Fitbit didn’t have the scale or retention of engineering talent to develop exciting, longer term innovations in the way Apple was doing with its wearables. Instead the focus was on incremental upgrades and a platform that changed with every device launch, until Fitbit finally built a proper smartwatch platform with the Ionic.

The Ionic finally launched in September 2017 as Fitbit’s riposte to the Apple Watch. But by this point Apple’s smartwatch was finding its groove, and in that very same month the Watch Series 3 was announced, with both GPS and a cellular connection in one device. The Ionic performed poorly for Fitbit. A Fitbit Ionic 2, which one source described as looking like a wider Samsung Galaxy Fit, and another as “like a spaceship”, was planned for launch in mid-2018 but was scrapped due to the poor performance of the first and the relative success of the company’s next product, the Versa.

The recent history of Fitbit is littered with experiments in health and wellbeing hardware beyond trackers and smartwatches and some, in hindsight, look like missed opportunities that have the potential to be resurrected by Google. One project wasn’t a wearable at all, but a bedside clock designed to aid sleep, using radar and microphones to determine the position of objects and sounds. It could detect the a noisy car, for example, and emit white noise to drown it out. Fitbit even considered having the sleep device read stories or podcasts, sources say, but the smart sleep clock was shelved after about nine months of development.

And then there were hearables, an area Google is already playing in with its Pixel Buds. In 2017, Fitbit entered discussions with the German startup Bragi, creator of The Dash smart Bluetooth earbuds, about a potential acquisition. The conversation never got quite serious enough, according to one source who was privy to those discussions, but Fitbit was interested in Bragi’s artificial intelligence technology and the “flexibility of the software” for its smartwatches and, perhaps eventually, a hearable of its own.

In fact, Fitbit’s skunkworks division created a prototype of a “Fitbit for your ears” that could track your heart rate. There are fewer motion artifacts and a lot more blood perfusion in the ear compared to the wrist, which would make such a device more effective for exercise tracking, but like the bedside clock it was eventually canned. The closest thing Fitbit released were 2017’s Flyer Bluetooth headphones.

Google was not the only company eyeing up Fitbit. Facebook has long been interested, as first reported by The Information. Facebook’s interest can be traced back as far as 2015 when the company first floated the idea of purchasing Fitbit, having just acquired the once-popular fitness app Moves, sources say. Perhaps to signal its interest, or just for a bit of fun, developers who attended Facebook’s F8 event in San Jose in 2015 were given Fitbit Flex trackers branded with the F8 logo. Facebook got more serious about an acquisition throughout 2016, but Fitbit ultimately wasn’t interested.

While Fitbit was struggling for relevance, it enjoyed a better market share than Google, whose quest to find its place in the wearables and consumer health and fitness industry has proved far less fruitful since the original Wear OS (then Android Wear) smartwatches were unveiled at Google I/O in 2014. According to research firm Canalys, Fossil Group, the biggest peddler of Wear OS watches, had just 4.1 per cent of the market as of mid-2019. Fitbit owned 24.1 per cent. These statistics are broadly indicative of the past five years of smartwatch sales, which have been increasingly dominated by the Apple Watch.

Google had to start taking action if it didn’t want to concede the market entirely, and this year announced it was purchasing talent from Fossil, along with a licence to technology that has been in development inside Fossil since 2016. The technology, codenamed Diana, is a combination of digital and analogue components – the first embodiment being the Fossil Hybrid HR, launched by Fossil itself earlier this month. Intriguingly, the Hybrid HR harks back to the e-paper display and simplicity of Pebble, the Kickstarter smartwatch company whose intellectual property is now owned by Fitbit.

By having Fitbit in the ‘Made by Google’ family, the company could soon have a much bigger slice of the market. This isn’t just a play for wearables, but for health. Google’s health projects thus far have ranged from cancer detection to anti-aging research. In 2015, it brought biotech company Calico and its modest goal of “curing death” under the Alphabet umbrella. But arguably its biggest gambit – and the one that has shown most results to date – is Verily, the former Google Life Sciences division that also now exists as an Alphabet subsidiary.

The Fitbit acquisition is far from a done deal. An antitrust case against it is building steam. On November 12, nine public interest groups sent a letter to the Federal Trade Commission, asking it to block the deal on the grounds that Google would be consolidating its monopoly power by acquiring the data of tens of millions more people.

“This transaction should not be permitted because Google already holds a dominant position in the digital marketplace, health data is critical to the future of that marketplace, and the data protection concerns stemming from the acquisition will have far-reaching consequences including a dramatic erosion of consumer privacy," the letter reads.

For its part, Fitbit says that no health data of its 28 million users will be sold to third parties or used for Google advertising. Google also said that it would not use Fitbit’s health and wellness data for ads, but it still leaves open the possibility for Google to gather other information such as messages and location data once Fitbit moves under the Alphabet umbrella. When asked for further detail on Fitbit’s acquisition by Google, a Fitbit spokesperson declined to comment.

The word of these two companies may not be enough to assuage fears among some. Just a few days after the acquisition was announced, The Wall Street Journal reported that Google had been working with health care system Ascension to process the data of millions of patients in the US, with questions around whether patients and physicians had given consent and whether hospital dates of service could be viewed as personally identifying data. Both companies publicly acknowledged the existence of the program, known as Nightingale, which is already under a federal inquiry into whether it was HIPAA-compliant, and is being used as ammunition to build the antitrust case.

This mounting scrutiny is further compounded by a bill titled The Smartwatch Data Act proposed by US senators Bill Cassidy and Jacky Rosen to stop wearable device makers selling identifiable data, which could be used by insurance companies to redline patients.

“There should be some protection for a person who’s wearing the watch, but does not know this data is being monetised,” Cassidy says, describing the timing with the Fitbit deal as “serendipitous.” Cassidy acknowledges that Fitbit and Google have promised to keep user data anonymous. “So the question is how much you trust Google’s future, based on its history,” he says. That history includes controversy over DeepMind’s data protection practices in relation to its partnership with the NHS and a lawsuit this June over a patient data partnership between Google and the University of Chicago’s Medical Center.

Inside Google Stadia

The acquisition could be a much-needed shot in the arm for Google’s Wear OS platform. In a blog post announcing the Fitbit acquisition, Rick Osterloh, Google’s SVP of devices and services, said the company sees “an opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market.” Reading between the lines, Google is strongly suggesting that Fitbit devices will one day run Wear OS. Together with the technology developed by Fossil and fast tracking of medical grade health tracking such as the SpO2 sensor, suddenly the Apple Watch doesn’t seem quite so untouchable.

“The right thing would be to build a new OS that doesn’t carry the bad reputation that Wear OS has,” says Anshel Sag, a wearables analyst at Moor Insights and Strategy. “And to built it in a way that was lightweight so that they could potentially run it on older hardware. “I do believe that building a Pixel Watch would be a good thing but they’ve gotten a lot of bad wrap for the Pixel 4 so I’m not sure there’s as much confidence as there was.”

The optimistic view is that the deal could iron out a lot of problems. Fitbit now has the resources it has sorely lacked to take on Apple, and Google gets a 28-million-strong user base overnight. Sources inside the company say many employees are now far more optimistic about the future of Fitbit.

A source inside Google's wearables division says that little has been communicated to the team. "A lot of the questions depend on whether they can close the deal, and until it's finalised, they're not telling us much," they say. It's a similar story inside Fitbit. While there's optimism for the future, sources say that most employees know little beyond what has been shared publicly. A source explained that the message from above was to continue as planned with the current Fitbit product roadmap and yearly cycle.

Amongst the uncertainty, there is relief that the company has been given a lifeline. Elsewhere, some are unsurprisingly concerned that Google could, ultimately, cut part of the workforce. While Google has a noted history of buying startups and killing products, several current employees say they believe Fitbit is too large of an acquisition to run that risk.

“It feels like a lot of the hardware innovation is maxed out,” says one former high-level Fitbit employee. “Is most of the innovation going to happen on the algorithm and experience side? It feels that way. And you need scale and you need new skills to do so. Recently, Fitbit hasn’t been able to prove it can play that game or that it has the resources to. Now it does.”

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