Will Alphabet Buy HubSpot?

Will Alphabet Buy HubSpot?

According to a story reported today by Reuters, Google’s parent company Alphabet is in discussions about buying marketing and CRM software vendor HubSpot.

If this one is signed, it would most certainly exceed Google’s highest purchase, which was Motorola Mobility for its Android push in 2011 for $12.5 billion. HubSpot, which went public in 2014, has a market capitalization approaching $35 billion.

The merger would also shake up the adtech and martech worlds by uniting big players in each software dynamic, paving the way for a new era of digital marketing and interaction with customers. Google will compete against Microsoft and Salesforce in the $71 billion customer relationship management sector. It would also signify the end of four long-term marketing automation

“It’s the marriage of adtech, martech, and CRM,” Formstack’s VP of Partnerships, Zak Pines, told CMSWire. Pines may have anticipated this in 2014 when he projected a Google-Marketo acquisition, which is about in this ballpark. Marketo was a private marketing automation business that competed with Cambridge, Massachusetts-based HubSpot but was eventually bought by Adobe in 2018.

“The title was ‘Why Google will buy Marketo,’ so I was off a little bit, but not bad for nine years ago,” remarked Pines. “… Google getting more into the marketing automation and CRM space, that’s pretty huge news.” Google would become more competitive with Salesforce as a result of the purchase, according to Pines, who added that “Google has their entire advertising business that in the long run would be very complementary to the types of companies that HubSpot serves with their products.”

When CMSWire contacted HubSpot about the coming purchase, a spokeswoman stated, “As is usual practice, HubSpot does not comment on rumors or speculation. We are committed to growing our business and supporting our consumers.

Can Google Dominate Enterprise Apps and Data Analytics with HubSpot?

HubSpot is an attractive acquisition target for Google, which could expand its corporate software offering. According to Predrag (PJ) Jakovljevic, chief industry analyst at Technology Evaluation Centres, it is a sensible option because of its ease of integration with Google’s suite of office apps and its solid marketing foundation, which is enhanced by Google’s analytics and search capabilities.

“It makes sense for me that Google would get into the enterprise apps space with something not too complicated and that could integrate easily with Google Office apps,” Jakovljevic wrote in an email. “HubSpot appears to fit that perfectly. A great approach to compete with Microsoft, Salesforce, Adobe, Zoho, and others.”

HubSpot pioneered the concept of inbound marketing and attracts thousands of attendees to their yearly event. HubSpot remains the strongest in marketing, while Google Analytics and search may also play a role, Jakovljevic said.

“Imagine using Hangouts for the meetings and calls with Google GenAI,” Jakovljevic told me. “HubSpot isn’t very good in commerce, so I’m not sure Google can help there. Not to mention migrating HubSpot to Google Cloud. In addition, Google’s data business will only grow. I may even go out on a limb and speculate whether Amazon will now acquire Salesforce.”

Pines claimed that a Google-HubSpot deal may result in rivalry between Google and Adobe.

“I think that Adobe is playing in the space, but differently, because Adobe is enabling adtech teams with tools as well as martech teams with Marketo,” Pines went on to explain. “The difference is that Google also operates as a media firm. Because Google is where the purchase and media occur. So it would be highly competitive with Adobe but in a unique way.”

Google and HubSpot Have a History

Joshua Feinberg, CEO of the Data Centre Sales & Marketing Institute (DCSMI), commented that because Google Ventures was an early investor in HubSpot in 2011, “it’s super-interesting to see Alphabet’s interest.” Feinberg said that HubSpot and Google already have many popular connections, including Ads, Search Console, Calendar, and Gmail.

Feinberg cites HubSpot’s growing interest in podcasts and video, indicating that adopting YouTube’s features might significantly increase the platform’s usability across the marketing and sales process. “HubSpot has shown much greater interest in podcasting and video in recent years both with its content engine/network and tools within its platform,” according to Feinberg. “Incorporating the power of YouTube – think YouTube Studio, Shorts, Live, and Community into HubSpot’s Social capabilities is exciting and full of possibilities. Many HubSpot clients have yet to properly explore the potential of video throughout the complete buyer’s journey/flywheel, which includes marketing, sales, content, commerce, and service centers.”

One possible source of friction, according to Feinberg, is that HubSpot’s AI approach has so far relied on OpenAI, which is aligned with Microsoft. Does it change if Alphabet acquires HubSpot through Gemini? Dharmesh Shah, HubSpot’s co-founder, is an OpenAI investor.

Feinberg also mentioned that we are entering a post-cookie situation in which attribution is so unclear. How will this function in a Google-HubSpot marriage?

What Will this Mean for HubSpot Customers?

Ace Bhattacharjya, CEO and creator of medicalrecords.com and a HubSpot user, expresses mixed sentiments about the proposed Google-HubSpot merger. As a Boston tech startup practitioner, he commented, “It’s a great outcome for a great local company, but it’s yet another example of Boston companies being bought by Silicon Valley.” Furthermore, he believes it is notable that Google has chosen to do this in the face of Federal Trade Commission Chair Lina Khan’s “anti-Big Tech bias.”

Laurie McCabe, co-founder and partner at SMB Group, also mentioned antitrust concerns about a Google-HubSpot merger. If that happens, McCabe believes it will be intriguing because Google has always created its apps organically rather than via acquisitions.

“It may be that Google sees a good opportunity to acquire a leading marketing and CRM app for SMBs, and possibly tying this into its search advertising/trying to scale HubSpot growth exponentially,” McCabe told Reuters. “HubSpot has over 200K clients, but that’s a drop in the ocean when compared to Google Workspace for Business, which I believe has billions. This may potentially be included as a premium option in Google Workspace.

In terms of technology, Bhattacharjya believes Alphabet can implement this as part of a more helpful Google Workspace, which could bring a lot of value to their SMB clients. “The lower acquisition cost for HubSpot to obtain more Google Enterprise clients, not all of whom are “enterprise,” would be enormously useful to both sides,” Bhattacharjya added. “The HubSpot app ecosystem already has hooks into many other smaller B2B companies that would also potentially get a shot in the arm.”

According to Feinberg, HubSpot was the final independent company among the four major martech platforms in the early 2010s, alongside Eloqua, Pardot, and Marketo. “Both HubSpot founders were adamant about building a Boston-pillar company that would employ thousands for generations,” Feinberg told reporters. “Does HubSpot’s US headquarters remain in Cambridge? Is HubSpot’s famed culture code still intact? While the future is unknown, one might expect that if Alphabet acquires HubSpot, the conclusion will be similar to Microsoft’s acquisition of LinkedIn. A scenario in which LinkedIn was given significant freedom to maintain its character.”

Antitrust concerns loom over Google’s potential acquisition of HubSpot

As Google’s parent company Alphabet considers an enormous purchase of HubSpot, the transaction not only promises to change the adtech, martech, and CRM landscapes but also lays the ground for a direct challenge to industry heavyweights such as Microsoft and Salesforce. With HubSpot’s pioneering approach to inbound marketing and its great integration potential with Google’s suite, the purchase may considerably strengthen Google’s business application and data analytics capabilities.

However, despite this potentially revolutionary cooperation, the specter of antitrust inquiry looms large. And not everyone believes that this huge transaction will ever appear.

“I find it highly unlikely this would happen,” stated R “Ray” Wang, chief analyst and founder of Constellation Research, Inc. “But if it did, it seems like a logical transition from platform to apps.”


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