What Did Google Do This Week?

GOOGLE NIXES HUBSPOT DEAL, EYES ANOTHER

Alphabet abandoned its plan to buy HubSpot, the company that helps businesses manage customer relationships causing a 10% stock plunge for HubSpot, and an all time high for Google. A huge deal if it had closed, but according to multiple sources, the two companies never got down to the nitty-gritty of hammering out an agreement. Reuters said Alphabet decided weeks ago to forego the takeover of the online marketing software company.

If the deal had happened, it would have been the biggest acquisition ever for Alphabet (HubSpot is valued at ±$25 billion). The deal would have been unlikely to have skirted unwanted attention from regulators who are worried about big tech companies getting even bigger. In the same year as Google’s historic (and fast approaching) antitrust trial, it’s likely that Sundar Pichai decided the deal would have seriously upset the regulators, making it even harder for Google to claim that it’s not a monopoly.

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SO WHAT?

The HubSpot deal was thought to be a move that would strengthen Google in its battle with Microsoft in the online cloud market. Microsoft dominates the customer relationship management (CRM) sector with its Dynamics 365 products, and HubSpot would have better enabled Google to offer cloud-based applications that they could sell to businesses. Google vs Microsoft is an age-old battle, but Pichai and co have clawed back a lot of MS Office’s supremacy in recent years through the expansion of Google Workspace.

Microsoft execs will most likely be a lot happier than anyone at Google about the collapse of the HubSpot acquisition. Microsoft’s recent multimillion-dollar deal settling a European antitrust complaint over its cloud licensing practices and this starts to look like a really bad week for Google and a good one for Microsoft. Asked about the MS antitrust deal, Google Cloud boss Amit Zavery said: “Microsoft's playbook of paying off complainants rather than addressing the substance of their complaint hurts businesses and shouldn't fool anyone.”

Why did Alphabet walk? Most likely big tech optics, but HubSpot’s popularity waning in favour of alternative CRM solutions is likely to have played a role. Either way, many HubSpot users are already expressing their relief at the deal collapsing, citing concerns about the way Google would have treated their business data. A recent CMSWire survey showed 48% of HubSpot employees said they would have considered leaving the service had the acquisition gone ahead, primarily due to worries about privacy.

A Google-HubSpot deal may happen in the future, but it is at least unlikely to happen before we know the results of Google’s antitrust trial. Google’s court case remains one of the biggest in the history of tech and could be a watershed moment. Google announced plans to buy Wiz, the cybersecurity firm that sprung out of Israeli military intelligence unit, right as we hit send last week. Stay tuned, the Google acquisition train continues to gain steam. Whether it will stall like the HubSpot one is unknowable right now, but at $23 billion, it’s undoubtedly going to attract the attention of Congress and leaders from other countries.

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