Google Pursues $30 Billion HubSpot Acquisition to Bolster Cloud Competition

Google's parent company Alphabet is said to progress in its efforts to acquire HubSpot, a marketing software company valued at $30 billion. This acquisition would mark Google's largest to date and is a strategic move to enhance its position in the cloud applications market, directly challenging Microsoft's dominance. Cowen analyst Derrick Wood noted that Google could leverage HubSpot to integrate various applications for clients, potentially increasing its market share in the productivity suite sector. Even though Google is the third-biggest supplier of cloud services, its market share is less than half that of Microsoft, with Amazon holding a third of the market.

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Reports of the potential acquisition first emerged in April 2024, resulting in an 11% increase in HubSpot shares. Despite skepticism over weakened demand, HubSpot’s financial performance remains strong, with a $6 million profit in the first quarter and a 20% year-over-year sales increase. Discussions between Google and HubSpot are ongoing, with no finalized deal. While Google lags in the cloud market, it is competing robustly in the AI space against Microsoft, Meta, and Amazon. At its I/O developer conference, Google unveiled significant updates to its AI tools, reinforcing its competitive stance, despite facing regulatory challenges in Europe alongside its peers.

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