Google's parent company, Alphabet, is getting advice on possibly buying HubSpot, an online marketing software company worth $35 billion, according to people who know about this. If Alphabet decides to go for it, this big purchase would be unusual for a big tech company at a time when the government is paying more attention to how these companies operate under President Joe Biden.
If Alphabet buys HubSpot, it would be its biggest purchase ever. Alphabet has a lot of money, $110.9 billion, and this deal would use some of that cash. Recently, Alphabet talked with bankers from Morgan Stanley about possibly making an offer for HubSpot. They discussed how much to offer and if the government's competition watchdogs would allow this deal, according to people who know about these talks.
Alphabet hasn't made an offer to buy HubSpot yet, and it's not sure if they will, people who know about the talks said, but they want to keep their names secret. Alphabet, HubSpot, and Morgan Stanley haven't answered any questions about this yet. After this news came out, HubSpot's stock price went up 11% to $693 on Thursday morning, while Alphabet's stock price dropped a little, by 1%, to $153.34. HubSpot, which started selling its shares to the public in 2014, makes marketing software for businesses that usually have up to 2,000 workers.
HubSpot made $2.2 billion in sales in 2023 but lost $176.3 million. Even with this loss, people investing in the company are hopeful about its future growth. This hope made HubSpot's stock price go up 50% in one year. The company is in Cambridge, Massachusetts. If Google buys HubSpot, it would be able to offer more in the fast-growing area of customer relationship management (CRM) software. This means Google could reach more business customers who spend money on marketing and advertising.
Google might tell the government's competition watchdogs that buying HubSpot would make the market more competitive, especially against Salesforce, which is a big player in the field. Google is currently dealing with several legal problems where it's accused of unfairly controlling the online search market. Alphabet's CEO, Sundar Pichai, is looking for ways to grow the company after it announced that its ad sales were lower than expected at the end of last year. Google's search engine and YouTube are facing tough competition for ad money from other online platforms like Facebook, Instagram, TikTok, and Amazon.
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