Google Acquires HubSpot for $31 Billion to ‘Take Market Share from Microsoft’ – Says Expert – TradingView News

Google parent Alphabet sp. GOOGLE is considering an acquisition HubSpot Inc. HUBS, an American marketing software company valued at $31 billion. The acquisition would significantly increase Google’s ability to compete Microsoft MSFT in the cloud application market,

What happened: : Analysts and investment bankers noted it would be Google’s biggest deal, expanding its offering of business-oriented products and applications, Reuters reported on Thursday.

Google is already challenging the Microsoft Office platform with its Google Workspace offering. According to Cowen analyst, the acquisition of HubSpot will make Google a competitor in the customer relationship management sector, where Microsoft offers Dynamics 365 products Derrick Wood.

“It appears that Google has aspirations to take away Microsoft’s productivity suite market share and may use HubSpot to connect applications for customers,” Wood said.

HubSpot, which provides marketing software for small and medium-sized businesses, is looking for ways to maintain sales growth in the face of an economic slowdown. CEO Yamini Rangan cited weakened customer demand due to high interest rates when announcing the company’s first-quarter results.

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Despite reporting 23% sales growth and 15% operating margin in the first quarter, HubSpot’s stock could have suffered had Google not pursued an acquisition. Analysts lowered their price targets for HubSpot shares, citing potential challenges for the company’s niche market if economic conditions deteriorate.

The HubSpot acquisition will provide Google with valuable potential customers, especially as the company plans to remove tracking cookies from its Chrome browser in late 2024, a Stifel analyst said Parker Lane.

“Removing third-party cookies from Chrome… puts more emphasis on first-party data, of which HubSpot provides plenty,” Lane said.

Why is it important?: Alphabet is in advanced talks with HubSpot. However, no final agreement has been reached, leaving room for potential changes or the emergence of other interested buyers.

Google’s potential acquisition of HubSpot is not just a single event, but part of a broader strategy to counter Microsoft’s dominance in the cloud computing sector. Earlier this year, Google Cloud raised concerns about Microsoft’s monopolistic cloud computing practices, highlighting the competitive tension between the two tech giants.

Moreover, the ongoing rivalry between Google and Microsoft is intensifying. In December, Google and Amazon made allegations that could potentially change Microsoft’s strategy in the cloud market. These moves underscore the high stakes that come with cloud computing.

Reduction: According to Benzinga Pro, Microsoft closed Thursday 0.34% higher at $430.52, while Hubspot closed at $612.82, up 0.31% from its previous close.

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This story was generated by Benzinga Neuro and edited by Pooja Rajkumari