Source: Zhitong Finance
Google The parent company Alphabet may acquire HubSpot (HUBS. US), an American marketing software manufacturer with a market value of US $31 billion, which will enhance Google's cooperation with enterprises in providing cloud applications Microsoft The ability to compete.
Media reported last month that Google was considering acquiring HubSpot. Analysts and investment bankers said that this would be Google's largest transaction and would expand its products and applications for enterprises.
Google has challenged Microsoft Office's dominance through its Google Workspace collaboration product. Cowen analyst Derrick Wood said that the acquisition of HubSpot would make Google a competitor in the so-called customer relationship management field, and Microsoft's Dynamics 365 product just catered to the demand in this field.
Wood said: "Google really wants to capture market share from Microsoft's productivity suite. They can use HubSpot to bundle applications for customers."
HubSpot is a company that develops marketing software for small and medium-sized enterprises. In the case of general economic slowdown, the company is looking for ways to maintain sales growth.
Yamini Rangan, CEO of HubSpot, said on the first quarter financial report conference call this month that customer demand has weakened because small businesses are worried about the impact of high interest rates on the economy.
HubSpot kept growing despite the reduction of customer scale, with sales increasing by 23% and operating profit margin of 15% in the first quarter. However, stock analysts warned that HubSpot's share price might be hit if it was not for Google's acquisition intention.
Most analysts cut their target prices after HubSpot announced its financial report. Goldman Sachs Analysts said: "The stricter loan standards may have a huge negative impact on SMEs (HubSpot's customers) 'access to financing."
Microsoft focuses on attracting large enterprise customers, while Google also tries to attract smaller companies, which constitute the majority of HubSpot's customer base.
Stifel analyst Parker Lane said that the acquisition of HubSpot would bring valuable sales information to Google and fill the blank of removing the tracking application called "cookie" from Chrome browser in the second half of 2024.
"Clear third-party cookies from Chrome... pay more attention to the first party data, and HubSpot provides rich data in this regard."
AI innovation is the core
Alphabet CEO Sundar Pichai and other executives said that Google regards advertising as a key way to make money from its AI progress.
Philipp Schindler, Google's chief commercial officer, said on the company's first quarter financial report conference call last month: "AI innovation in our advertising ecosystem is the core of all aspects of our product portfolio."
The transaction between Google and HubSpot may face challenges from antitrust regulators, although many experts believe that the merger will not curb competition in view of the fact that the businesses of the two companies do not overlap.
MorningStar analyst Dan Romanoff said that Google may think that the benefits of this potential transaction outweigh the possibility of facing regulatory challenges.
Romanoff said: "In the field of cloud computing, Amazon It is undoubtedly the leader, with Microsoft ranking second and Google ranking third. Google may think that acquiring HubSpot is equivalent to owning Microsoft Dynamics 365, which will make it more competitive in this field. "
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