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Google parent company Alphabet is reportedly advancing in its bid to acquire HubSpot, a marketing software company valued at $30 billion.
If completed, this would be Google’s largest acquisition to date and a significant move in its strategy to compete with Microsoft in the cloud applications market.
Cowen analyst Derrick Wood commented on the strategic significance of the acquisition, stating, “It does appear that Google has aspirations to try to take market share from Microsoft in the productivity suite, and they can use HubSpot to bundle applications together for clients.”
Currently, Google is the third-largest cloud services provider, holding less than half the market share of Microsoft, with Amazon dominating a third of the market.
The acquisition of HubSpot is seen as a pivotal step for Google to strengthen its position in the cloud sector.
The first reports of Google’s potential acquisition emerged in April, causing
HubSpot’s shares to surge by up to 11%. Despite some skepticism from analysts regarding weakened demand for HubSpot’s products, the company reported a profit of $6 million in the first quarter, with sales increasing by more than 20% from the previous year.
According to Bloomberg, Google’s negotiations with HubSpot are “ongoing,” and no deal has been finalized yet.
While Google trails behind in the cloud market, it is on a more level playing field with Microsoft in the artificial intelligence (AI) space. Both companies, along with Meta and Amazon, have made significant AI advancements and announced major new AI applications and features over the past year.
Google’s recent updates to its AI tools suite, Gemini, unveiled during its I/O developer conference, have reinforced its status as a major AI player. Shortly after, Microsoft made its own AI announcements but is currently facing scrutiny from European regulators.
As Google continues its efforts to enhance its market position, the potential acquisition of HubSpot represents a bold move in its ongoing rivalry with Microsoft.