Google’s Parent Company Considers HubSpot Acquisition in $33B+ Deal

By Ben McCarthy

Rumors are swirling once again as HubSpot is pegged to be snapped up by Google’s parent company, Alphabet.

Although nothing has been confirmed officially and HubSpot have told multiple media agencies that they don’t comment on rumors or speculation, shares are up 11% since the news broke.

What’s the Latest?

HubSpot’s market cap is currently at $33B, and Reuters have confirmed with sources that Alphabet have met with Morgan Stanley investment bankers about a potential offer for HubSpot. Whilst an acquisition of this size would be very out of character for Alphabet (their last huge acquisition was in 2021 for security firm, Mandiant, bought for $5.4B), ‘there is no smoke without fire’. Plus, Alphabet are sitting on a huge $118B cash pile.

Alphabet and HubSpot would certainly make an interesting pairing. Although HubSpot is regarded by many in the Salesforce ecosystem as more of a ‘frenemy’ than a nemesis, this acquisition could be a real cause for concern; Salesforce would have to count Alphabet, one of the largest tech companies in the world, as a direct competitor. 

The acquisition may seem strange at first, but Alphabet do have a huge foothold in the B2B market. The vast majority of revenue comes from search advertising, followed by tools such as Google Ad Manager, Google Analytics, and Google Cloud.

HubSpot are famous for their marketing automation suite, but they also have products covering CRM, customer service, and CMS. With Alphabet heavily investing in AI via their Gemini platform, they may see an opportunity to grow HubSpot and integrate it into their vast B2B platform – all powered by AI.

It’s fair to say that HubSpot is the “Salesforce” of the marketing automation world, with some estimating that the platform holds more than 30% of the market share. With a primary focus on the SMB market, HubSpot have a freemium offering to lock customers in early. However, as with most platforms, they will be keen to capture more of the enterprise market that Salesforce holds. 

Making up a significant portion of many countries’ revenue (43.5% of GDP in the US, and 53% of GDP in the UK), there are huge opportunities to be had in the SMB market. Salesforce have recently released “Starter” and “Pro” versions of their famous CRM, arguably to compete with the likes of HubSpot. We could draw similar comparisons with the release of Marketing Cloud Growth – a new, lighter, Salesforce product built on the core platform (as opposed to classic Marketing Cloud which is off platform).

Final Thoughts

So, if the acquisition does go ahead, what would this mean for Salesforce? 

Well, it would turn up the heat on the competition, that’s for sure, as Salesforce would have to count Alphabet (who have until now remained a close partner) amongst their competitors. 

As companies continue to go through their digital transformations, it seems that the SMB market may be ripe for disruption, especially as advanced CRM platforms are most probably saturated amongst larger enterprise businesses. 

Whilst it’s still early days for artificial intelligence, once these tools start showing real ROI, companies will be spending their cash hand over fist to implement them swiftly – all with the hope of seeing unprecedented productivity gains within their businesses. For now, we will wait with bated breath…

The Author

Ben McCarthy

Ben is the Founder of Salesforce Ben. He also works as a Non-Exec Director & Advisor for various companies within the Salesforce Ecosystem.

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