Will Google Takeover HubSpot? – CX Today
Google parent Alphabet has drafted in advisers as it mulls over an offer for CRM software giant HubSpot, according to Reuters’ sources.
A possible bid would likely be Alphabet’s largest acquisition ever, given HubSpot’s market cap of $33.95BN – as of April 2024.
Yet, it already has the funds freed up, with Reuters noting that Alphabet reported a “cash pile” of $110.9BN at the end of 2023.
One possible blocker is the increased regulatory scrutiny of the tech sector in the US – which may cause reservations, as Google already faces several antitrust cases.
Indeed, that has been a critical discussion point in Alphabet’s meeting with Morgan Stanley investment bankers – as per Reuter’s sources – with those conversations happening “in recent days”.
However, Google could argue that the acquisition will allow them to increase competition in the sales and marketing spaces – currently under siege by Salesforce and Microsoft.
Either way, those conversations may be make or break as rumors of Google’s possible bid swirl.
For its part, HubSpot has refused to share insight into its position on a potential offer. A spokesperson from the CRM stalwart stated:
As standard practice, HubSpot does not comment on rumors or speculation. We continue to focus on building a great business and serving our customers.
Morgan Stanley and Google have not yet responded to requests from CX Today for a comment.
Meanwhile, share prices at Google dropped one percent on the news. Whereas, HubSpot’s stock surged by 11 percent.
That caps a remarkable year for HubSpot, with its share price rising by more than 64 percent year-to-date – with rapid growth over the past four months.
In recording such growth, HubSpot – like market rival Salesforce – has bucked the general CX tech trend, as many market rivals stutter in a tricky macro-environment.
Even Microsoft has struggled, with Google’s chief tech rival reporting a drop in CRM bookings in January.
As such, Google may enter the market with caution. However, this could just be one move in a broader strategy to build momentum in the CX space and bolster its broader cloud computing business.
Will Google Pull the Trigger on a Big CX Move?
The HubSpot rumors break as Google’s CCaaS business starts to pick up steam and become a “door opener” for Google Cloud – at a time when Google is looking for new growth engines.
That search comes as GenAI-driven conversational search starts to threaten its search engine domination, its YouTube video streaming service faces heightened competition, and advertising sales sink below expectations.
Countering those trends is likely the central mission. However, with CCaaS momentum, a broader customer experience venture seems to have risen up the agenda.
On CCaaS, its solution – the Google Contact Center AI Platform (CCAI-P) – notably has a CRM-centric design, which enables real-time bidirectional data flows between it and HubSpot – alongside other CRMs.
As such, Google could build out its customer service proposition while bridging it with marketing and sales via the acquisition.
Moreover, with conversational intelligence, virtual agent, and UCaaS solutions – alongside its broader AI prowess – Google is one of the few businesses that could add significant firepower to HubSpot’s arsenal.
Of course, there is recent history of tech giants stepping into the CRM space and failing – with Meta’s somewhat disastrous $1BN acquisition of Kustomer leaving both businesses worse for wear.
Also, the stakes are even higher as HubSpot is an even more high-profile CRM player – recently reaching 100,000 customers and $1BN in annual recurring revenue (ARR).
Nonetheless, with Google Cloud’s broader CX-related portfolio, there are many more adjacencies and reasons to be excited about the possible acquisition.
