Speculation is rampant once again as HubSpot is rumored to be acquired by Alphabet, the parent company of Google. While no official confirmation has been made, HubSpot has informed various media agencies that they do not provide comments on rumors or speculation. Shares of HubSpot experienced a significant 11% increase following the release of reports.
HubSpot’s current market capitalization stands at $33 billion. Reuters has verified through sources that Alphabet has engaged in discussions with Morgan Stanley investment bankers over a potential acquisition of HubSpot. Although Alphabet’s previous major acquisition was in 2021 for security firm Mandiant, purchased for $5.4 billion, an acquisition of this magnitude would deviate from their usual behavior. However, the saying ‘there is no smoke without fire’ suggests that there may be some truth to the rumors. In addition, Alphabet possesses a substantial cash reserve of $118 billion.
Alphabet and HubSpot would make for a fascinating combination. The acquisition may appear unusual initially, but Alphabet does have a significant presence in the B2B market. Most of the revenue is generated through search advertising, with additional contributions from tools like Google Ad Manager, Google Analytics, and Google Cloud.
Ali Schwanke, a MarTech contributor and founder of the Simple Strat agency, said this could be an incredible boost for Boston-based Hubspot.
“With HubSpot focusing a lot of their efforts on building their ecosystem, this could be the accelerant that truly ignites that fire and brings incredible value to current and future users,” she told MarTech. “Additionally, more and more companies are seeking to consolidate their tech stack and an acquisition like this certainly supports that trend. As a HubSpot user and partner myself, I am curious what this would make possible from a reseller and consultant perspective.”
HubSpot is well-known for its marketing automation suite, and it also offers a range of products that include CRM, customer service, and CMS. Given Alphabet’s significant investment in AI through its Gemini platform, there may be potential for HubSpot to expand and be seamlessly integrated into its extensive B2B platform, all driven by the power of AI. Some say HubSpot has more than 30% of the market, which makes it the “Salesforce” of marketing automation.
If the acquisition does go ahead, what impact would it have on Salesforce?
It would definitely intensify the competition, as Salesforce would now have to consider Alphabet as one of their rivals, despite their previous close partnership. With the ongoing digital transformations in companies, it appears that the SMB market is poised for potential disruption.
Even though AI is still in its infancy, businesses will be spending like crazy to adopt these tools as soon as they start generating a return on investment (ROI), hoping to experience productivity increases never before seen.
Until then we shall wait with bated breath!