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HubSpot logo is seen at Boston Convention and Exhibition Center on September 06, 2023.Photo: Chance Yeh (Getty Images)
Google parent Alphabet is reportedly making headway in its bid to acquire the $30 billion marketing software company HubSpot. That deal, which would be Google’s largest-ever acquisition, is part of the company’s strategy to compete with Microsoft in the cloud applications market.
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“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,” Cowen analyst Derrick Wood said in a research note seen by Reuters.
Google is the third-largest cloud services provider but holds less than half of the market share of Microsoft. Meanwhile, Amazon controls a third of the market.
Reports of Google’s potential acquisition first surfaced in April, sending HubSpot shares up as much as 11%. HubSpot’s financials keep getting better, though analysts are skeptical over weakened demand for its products. The company swung to a profit of $6 million in the first quarter, with sales surging more than 20% from the prior year. Google’s talks with HubSpot are “ongoing” and no deal has been reached, according to Bloomberg.
While Google’s still behind in the cloud market, it’s on a much more even playing field with Microsoft in the AI space, where it’s vying with a number of Big Tech contenders for dominance — with convincing odds. Google, Microsoft, Meta, and Amazon have all announced major new AI applications and features over the past year as well as their own custom AI chips. But Google dropped a motherload of updates to its suite of AI tools called Gemini during its I/O developer conference, solidifying its spot as a major AI player. A week later, Microsoft made its own AI announcements, but they’re now facing heat from European regulators.
This article originally appeared on Quartz.
