Google parent, Alphabet, dumps HubSpot acquisition plan as stock drops

Google has dumped its intentions to buy CRM expert HubSpot, forgoing a possible merger that may have helped Google Cloud and been valued at billions of dollars.

Bloomberg reported on Wednesday, July 10, citing anonymous sources, that the talks did not proceed to the due diligence phase, despite Alphabet expressed interest in a possible partnership with HubSpot earlier this year.

HubSpot is a startup that provides marketing software for small and medium-sized enterprises.

The company’s approach is to use inbound marketing to engage clients with a business brand from the moment they first become aware of it. The company offers software that lets users create interactive advertising content.

Indications are that despite suffering a $176 million operating loss last year, HubSpot brought in over $2 billion in revenue.

The market valuation of the Cambridge, Massachusetts-based business is currently above $25 billion, down from $32 billion when rumours of a possible Google takeover first surfaced in April.

Reports stated that HubSpot’s shares saw their largest decline since 2020 on Wednesday, falling as much as 19%.

With this deal, Google would have made its largest purchase to date, more than doubling the previous record $12.5 billion paid to Motorola Mobility for its Android play in 2011.

Indications are that a merger at that time would have likely been subject to drawn-out examinations by US antitrust authorities.

Reports stated acquiring HubSpot would allow Google to offer more CRM services, open up new avenues for growth for its cloud computing division, and open up new markets for expansion at a time when Alphabet’s advertising division was already facing increased competition.

Earlier report stated that Google is launching a $75 million Google.org AI Opportunity Fund in addition to investing $1 billion in developing its data centre facilities in Virginia.